Private share trading platform, AngelBourse is eagerly anticipating the new Financial Services and Markets Act, due to come into effect in autumn this year. The launch of its online primary capital raising and secondary trading market is dependent on the passing of this law.
AngelBourse is an online trading vehicle with a pan-European focus that is giving sophisticated investors the opportunity, through subscription to its service, to commit to small and medium-sized enterprises and monitor the performance of their investments in a secure environment. The service will provide angels and specialists in start-up finance with a means of recycling their resources earlier and so will substantially increase the flow of funds available to new ventures.
The platform is also aiming to help entrepreneurs get onto the first rung of the ladder. It is specifically tailored to help private companies raise capital, have their shares traded on an open market and generally raise their public profile. It offers easier entry criteria and a regulatory regime designed for the needs of private companies.
In addition to company data, the AngelBourse website also provides constantly updated information on legal and other investment-related topics, available exclusively to AngelBourse subscribers.
In the UK, the platform will initially operate through eight regional bourses including Scotland, Ireland and Wales. The firm has plans to follow the launch with a European rollout of the new bourse. By developing a regional presence in selected cities, the firm hopes to encourage local people to invest in their local businesses, cultivating a spirit of entrepreneurship in local communities.
For a successful launch, Angel Bourse is relying on reforms in the new Financial Services and Markets Act specifically concerning Part II of the act that outlines rules for regulated and prohibited activities in section 19 the general prohibition; section 20 requirement for permission authorised persons acting without permission; and section 21 restrictions on financial promotion. It is anticipated that the reforms will be passed by the end of November. AngelBourse is dependent on the passing of this law to be able to start trading.
As far as pricing is concerned, Charles Ross, chairman, says AngelBourse will not be involved in fixing prices. Potential buyers and sellers will fix the price. How the process works is through an online “bulletin board market”, a quotation medium for subscribing members. If a company has shares it would like to sell, it can post the shares and a price onto the bulletin board. An investor interested in buying shares can then put up an offer and will then have
to wait and see if that offer will be accepted.
For the entrepreneur, AngelBourse will enable companies to spread their fundraising across a number of different sources and it will also allow current shareholders to trade their shares more readily.
Companies posted on the AngelBourse exchange will be active in all industry sectors, ranging from information technology to manufacturing, health and leisure. Charles Ross, chairman of AngelBourse, says: “Many private investors have a special interest in a particular sector or industry often one in which they are working in, or have done in the past. AngelBourse helps them identify the best opportunities and track the performance of different companies in whatever area they are especially keen to invest.”
Jennie Rubel of the company says that AngelBourse is not in competition with likes of exchanges such as Ofex, AIM or NASDAQ, if anything, the organisation is aiming to be complementary and as the companies on AngelBourse mature, they will be able to graduate onto such exchanges. Co-founder of Easdaq (now Nasdaq Europe), Jacques Pudsey, has been appointed European director and is co-ordinating AngelBourse’s European rollout, working closely with the business angel network across Europe. For the rollout, Pudsey says he is targeting what he calls the “local champions” in Europe, that is the regions where most of the new companies and a cluster of business angels and sophisticated investors are centralised. He cites key locations in Europe as the Benelux region, Munich, Barcelona and the Valle d’Aosta.
The main obstacle here says Pudsey is that regulations vary in the different regions and the rules drafted by AngelBourse in the UK will have to be looked at and reassessed with regulators local to each region.