TECH ENTREPRENEURS SHARE THEIR KEY LESSONS ON LISTING ON THE ASX: PART 3
Written on the 17 October 2017
OVER the past two months, 25 companies have listed on the ASX and the path to getting to this stage is not an easy one, as they will all testify.
In our third and final part, we speak to four tech entrepreneurs about their experience of listing on the ASX.
Danny Lessem (pictured), CEO of ELMO (ASX: ELO)
"This being said, the rewards far outweigh the effort due to the tremendous opportunities that being an ASX-listed company present. For ELMO, this was the ability to fund and commercialise our growth plans."
For instance, we were able to fill our capital requirements to expand our product suite and to acquire additional companies that meet our mandate (complementary technology or bolt-on point solutions). It also increases our transparency in the marketplace which is important for ELMO as we have a large percentage of government customers. The IPO also increased the profile of ELMO which assisted in new business lead generation. Finally, the listing enabled ELMO to spread ownership amongst employees and align staff to business success.
"Do not undertake a reverse takeover, unless you have an extremely good reason to do so! If you must, consolidate the two legal teams to streamline the process as much as possible."
If applicable, detail the regulatory framework in which your company operates as much as possible in your first draft prospectus so that that ASX does not need to go back and forward requesting information from you. This all takes time and money.
"ASX is a very volatile market at the small-cap end of town. As a company is becoming established, a small cap company can see its shares move 10 per cent in a day for no real reason, up or down! This can make it a challenge to raise quality capital in the early days."
I have tended to cultivate a group of quality investors who now follow us into new opportunities who have a real understanding of the company and its prospects so they can buy when shares fall for no reason.
"For us, the biggest challenge we faced when listing was dealing with individual egos and self-centred interests. The more of these you have to deal with, the less control that you, as the founder, will have over your own business."
But if you make sure that you have a solid foundation, team, and commercial opportunity, then your post-listing success will be directly proportional to how much nonsense you should take from those people who are getting in your way during the listing process.
Business News Australia