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Phone mast maker Arqiva: Oh, the £6bn float? Yeah, about that...

Anonymous Coward
Anonymous Coward

Once upon a time, the idea of a selling stocks was to raise capital.

Well, neither investors nor regulators like the risks involved in real startups, and the institutional investors aren't interested in anything with a market capitalisation less than £50-£100m. The levels of bureaucracy and cost in raising capital on a major trading exchange are very high, so it isn't a cheap way to access capital. That's why startups have to rely on friends and family, "business angels", private equity and venture capitalists. Or things like Kickstarter.

Arguably the Kickstarter concept is excellent, and fills in for the sclerosis of modern equity exchanges, but the process looks a bit rough around the edges - needs better screening of crap ideas and dodgy founders, better prospectuses, and it needs to educate investors more. In reality the regulators hate Kickstarter, and want to smother the whole thing, and that's the problem - how much regulation and oversight should an equity investment platform have? At the moment the regulators believe you can never have enough, but that reduces the stock exchanges to mere secondary trading platforms, best suited to institutional investors, with zero first time equity raising.

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