On the agenda of many stock exchanges today is the question of providing a regulated marketplace where investors can buy shares of vetted start-up companies, and where start-ups can raise the capital they need from these investors. World Congress of Angel Investors – WBAF 2019 will host a panel discussion on the future trends of start-up markets and stock exchanges and will discuss the pros and cons of start-up markets, aiming to provide a better understanding of what the possible trajectory might be for start-up stock exchanges and start-up private markets.
Up to now, back-door listings and reverse listings have been the only ways for start-ups to be listed on stock exchanges. Today, however, new opportunities are emerging. The Stock Exchange of Thailand, for example, hopes to play a role in pushing start-ups as a base for development in the digital era; their aim is to foster the start-up ecosystem. They believe that stock exchanges have a duty to help develop financial technology, or fintech, and to create platforms that will enable start-ups to raise the capital they need if they are to grow and make a real profit.
Navigating financial regulations can be a real challenge. In the new exchange model (for example, the Stock Exchange of Thailand), stock exchanges strike a balance between popularity, that is, the number of start-ups listed, and the quality of the start-ups it lists. The relative lack of financial stability and low liquidity of start-ups—compared to blue-chip stocks—is a risk, but it is not difficult to imagine that start-ups would be willing to disclose more information in order to get listed. The more they disclose, the better the investor protection.
To address the needs of the start-up ecosystem, some stock exchanges have launched start-up private markets, which do not require authorisation from regulators, given that these private markets basically act as owners and therefore provide a secure environment for investors and start-ups. Other alternative markets include the Elite Program of the London Stock Exchange, the Private Market of the Istanbul Stock Exchange, and Funderbeam, where growth companies are funded and traded across borders and a start-up marketplace powered by blockchain in some cases.
This panel will focus on the future trends of start-up markets and stock exchanges and will discuss the pros and cons of start-up markets, aiming to provide a better understanding of what the possible trajectory might be for start-up stock exchanges and start-up private markets.