Floating on a stock market: your options

What is a flotation and why consider it?

A stock market flotation involves selling a percentage of your business in the form of shares on one of the stock markets. There are three stock markets in the UK. At the top is the main market of the London Stock Exchange, which is generally populated by large companies. The other two markets are aimed specifically at smaller companies - the Alternative Investment Market and PLUS.

When you decide to float a business, you get it independently valued and then decide what proportion of shares to sell. The amount you decide to sell will depend on how much money you want to raise. You might need enough to buy a piece of plant, for example, to pay back a venture capital investor who wants to realise their investment, to expand your team or to launch a product overseas.

There are additional benefits to a stock market float besides raising funds. It can result in your business gaining a higher public profile and can also raise its status with customers and suppliers. Many companies that float on a stock exchange also find that it increases staff motivation - especially if you issue your employees with shares in the company.

Check whether your business is suited to flotation on the London Stock Exchange website - Opens in a new window.

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

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