Stock exchange
The stock market is a type of venture capital intended mainly for large companies. The stock market lets entrepreneurs trade securities (such as stocks and bonds).
Why raise money through a stock market listing?
Are you looking for funding for your business? Or do you need money to market a new innovative service or product? Then you may choose to go public with your business. On the stock exchange, you sell shares in your business. By issuing shares, you get money which you can use to make new investments and grow.
Main stock market indexes
If you want your business to go public, you need to choose a stock exchange. The main stock exchange in the Netherlands is Euronext Amsterdam.. The stock market indexes used by Euronext are:
- the Amsterdam Exchange index (AEX)
- the Amsterdam Midcap Index (AMX)
- the Amsterdam Small Cap Index (AScX)
The different stock market indexes have to do with the size of a business. A stock market index indicates the average price of listed companies included in the index.
Going public via an IPO or a DPO
An IPO almost always involves an intermediary, such as an investment bank. Its tasks include helping decide the number of shares and at what price they will be issued on the stock exchange. And that all legal and stock market regulations are met.
You must meet a number of conditions for an IPO on Euronext Amsterdam:
- The business must be older than 5 years.
- The business must have at least € 5,000,000 in equity.
- The shares to be issued must have a value greater than €5,000,000.
- The business must have turned a profit in at least 3 of the past 5 years.
A Direct Public Offering (DPO) allows you to sell your shares directly to the public. With a DPO, there is no need to use an investment bank. This saves a lot of time and money. However, special brokers often help with a DPO to ensure the process is successful.
Costs of an IPO
Make sure you are well informed about the costs of an IPO. Euronext will charge the company various costs for listing and trading the securities. For example:
- admission fees
- annual listing fees
- admission fees for a follow-up issue of shares and depositary receipts
There are also brokerage fees, commission agent fees, additional accountant fees and more.
Mandatory reporting
Listed businesses are required to produce an annual report or financial statement. You report to shareholders on developments within your business. Besides the profile of your organisation, the annual report describes your vision, mission, maketing strategies, objectives, working methods, and successes.
Listed businesses must also report on their sustainability policy, objectives, and results. This includes reporting on the impact of the business and those of its supply chain partners on people, the environment, and society. Read more about what the CSRD means for listed SMEs.
The SME exchange
The regular stock market is out of reach for most entrepreneurs. Smaller businesses can also be listed on the NPEX, a special stock exchange for SMEs. You must meet several conditions for an IPO on the NPEX:
- The business has been in existence for at least 3 years.
- The business must have made a profit for at least 1 year.
- You want to finance a minimum of €500,000.
- You must publish your company's performance, such as fiancial statements and half-yearly figures.
Other forms of financing
Are you looking for financing for your business? Then you can also apply for funding from a bank or private investors, or seek alternative forms of financing. For example, crowdfunding. You will increase your chances of getting financing by asking an expert for help. You can find more informtaion in KVK's Financing Guide.