Floating on a stock market: your options
The flotation process
A typical flotation will take at least three months to complete, but could take as long as a year to ensure that everything is in place and the company is ready to go public. For this reason, it is important to ensure that you do not let the flotation distract you from the day-to-day business of running and growing the company.
When undertaking a flotation, you should:
- Choose the right advisers to guide you through the process. See the page in this guide on how to appoint your advisers.
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Make sure your accounts and legal structure comply with the rules and regulations of the market you're joining.
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Nominate someone in the company - typically the finance director - to take responsibility for the process.
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Decide what type of flotation you want. An introduction is the easiest and cheapest option, and is used if enough of a company is already in public hands - perhaps for a move from Alternative Investment Market to the Main Market, for example. In a private placement your shares are offered to selected institutional investors. This allows you to raise capital with lower costs - but the reduced shareholder base could mean a reduced market in your shares further down the line. In an initial public offer shares are offered to the public and investing institutions. This can help you raise more capital but is the most expensive route to market.
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Prepare a prospectus which will contain the key information about the company and the share offering. Remember that you're legally responsible for the accuracy of any information within this document.
Subjects covered in this guide
- Introduction
- Is your business suitable for flotation?
- What is a flotation and why consider it?
- Advantages and disadvantages of flotation
- Choose the right market
- Appoint your advisers
- Prepare for a flotation
- Price your business' flotation
- The flotation process
- Here's how we prepared our business for flotation
