A group of City executives are raising millions of pounds to fund the launch of a ‘mini-Nasdaq’ exchange aimed at venture capital-backed companies.
Sky News has learnt that Jon Prideaux, a former chief executive of London-listed Boku, and former AIM boss Martin Graham, have approached investors about a £4m fundraising for the Global Growth Market (GGM).
The project, which usurps an earlier proposal from the executives to take over the running of AIM from London Stock Exchange Group, intends to revive the public market for growth companies by attracting capital from venture funds which predominantly invest in private businesses.
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Sources close to the new market said it would eliminate fund management fees and carried interest in return for providing half of the capital needs of eligible companies, in an attempt to incentivise them to use the GGM.
“Public markets stopped working for growth companies years ago,” said Mr Prideaux, the GGM chairman.
“We are building a new market that brings both companies and capital back to the public markets – by offering a better deal to both.”
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The £4m being targeted in the fundraising discussions is aimed at providing capital for the GGM’s technology platform and to see it through a licensing application process with the Financial Conduct Authority.
A teaser document, which has been seen by Sky News, has been circulated to prospective investors.
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In it, GGM cites said there were “more than 30,000 late-stage venture companies, holding $4 trillion in value, stranded in private portfolios”.
“Founders can’t raise efficiently. Investors can’t exit. Employees can’t sell. Public markets are too cumbersome; private capital is over-stretched,” the document said.
LSEG has repeatedly said that neither AIM nor the main London Stock Exchange are for sale, despite concerns that their minuscule contributions to the group’s earnings have relegated their importance within it at a time when the City is losing out to rivals for lucrative public listings.
