Sharemark Primary Fundraising Service

4th July 2011

This summer, HM Treasury is intending to implement the doubled Prospectus Directive limit, which will give small and medium-sized enterprises (SMEs) the opportunity to access funding of up to €5 million ahead of the European Commission deadline of 1 July 2012. In preparation for this move Sharemark, the alternative stock market for small companies, has launched a substantial initiative aimed at helping these businesses secure the funding they need to help them grow.

The innovative and new solution is designed to be fully-integrated and will provide SMEs looking to raise between €500,000 and €5 million with access to a fundraising channel through which they will be able to gain capital from the retail investor community.  Sharemark, working with the retail client functionality provided by The Share Centre, will co-ordinate the entire fundraising package, from due diligence to the completion of the fundraising process.

The comprehensive package involves the support of key Preferred Partners. Lesmoir-Gordon, Boyle & Co Ltd (“LGB”) will provide corporate finance expertise; while legal expertise will be provided by Squire Sanders Hammonds (“SSH”). Sharemark for its part will provide the marketplace where investors can view the offer documents before investing through The Share Centre or a third party broker of their choice.

This Primary Fundraising service is extremely competitive compared to market alternatives. Following a pre-admission screening (charged at £2,450 + VAT), companies will enter a due diligence process resulting in an Admission Document. Companies that successfully attract their minimum threshold of money to be raised will then be charged a £99,000 admission fee, including the costs of LGB & Co Ltd and SSH, with an additional five per cent commission charge deducted from the total funds raised prior to transferring the balance of cash to the fund-raising company. Thus a company raising £2m will face a total cost of just over £200,000: less than one-third of the cost of similar equity fundraising on AIM.

Owned and operated by The Share Centre, Sharemark is an order driven stock market with a visible online trading mechanism. Formed in 2000 by Share plc as a junior stock market in its shares, it was opened up as a solution for other smaller companies with large shareholder bases in 2002. Shares are traded in a transparent online auction, where the price is fully determined by supply and demand, monitoring the limit prices at which buyers and sellers are prepared to deal.

For more information about Sharemark's Primary Fundraising Service, please contact Sophie Douglas, Manager, Sharemark or by phone on 01296 439 432.

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