STOCK MARKETS FUNDING COMPANIES THROUGH THE OPPORTUNITIES AND CHALLENGES OF 2020
Orla O’Gorman,
Euronext is the international shop window for enterprise in Ireland. As part of the Euronext group of exchanges, our listed companies trade on a single platform across six countries, connected to 5,000 investors, writes Head of Listing Ireland Euronext
Fundamentally, our role as an exchange is to facilitate access to capital by connecting local companies to global investors. To this end, we are passionate about how best we can support the current and next generation of companies to raise funds and attract international investors.
Funding your company is one of the most important decisions for every business owner. How much? For what? What source (equity/debt)? From whom? Determining the correct source of finance is key to ensuring that it is one that will support the future of your company and deliver to its ambitions.
FUNDING SOLUTIONS
Stock markets have proven to be a robust source of funding throughout the current crisis. Funds raised on the initial listing, the IPO, are often what is focused on. However, it is the ongoing access to subsequent funding in an efficient manner that really sets the stock market apart as a source of capital. In 2020, this funding capability has enabled companies to avail of opportunities arising from the disruption caused in the Covid environment, for acquisition finance and also for balance-sheet support during this challenging period.
In 2020 to date, €39 billion has been raised through equity finance on Euronext markets, and almost €4 billion of that was by Irish listed companies.
Often this source of funding is overlooked by entrepreneurs when deciding their funding strategy. Indeed a stock market listing offers many other long-term benefits beyond raising capital. A listing gives a company a real valuation, shares that can be used as a currency for acquiring other businesses, in addition to attracting, retaining and rewarding staff in a meaningful way.
A stock market listing also enables founders to remain in control of their business, to participate in the upside and access long-term liquidity for their shareholding. It brings profile, credibility and visibility. It is a permanent source of capital and positions companies on a platform with ongoing access to deep pools of global capital.
IPOREADY
At Euronext, we work with companies at all stages of development, from those exploring funding their financing options, to those in the Euro Stoxx 50. As part of our support for private companies we run a strategic financing programme, IPOready, in partnership with Enterprise Ireland and the Ireland Strategic Investment Fund. IPOready is designed to give entrepreneurs the skill sets they require to raise finance, get their companies investment ready, access capital markets and give them a network of investors, advisors and entrepreneurs.
SCALING IRISH ENTERPRISE
Successful scaling of Irish enterprises is critical to the future of Ireland Inc. We are actively engaged in a number of initiatives to support this, and are committed to making the route to market as straightforward as possible. We actively advocate for changes to government tax policy for entrepreneurs, promoting equity investments, and simplification of European securities’ regulation.
We are proud members of the Alliance for Innovation Driven Recovery in Ireland. This alliance, comprising of Scale Ireland, IVCA, HBAN and TechIreland, represents the funding escalator for companies at their various stages of development. The IPO agenda, and enabling companies to access capital markets, is an important part of this funding escalator. In addition, we are actively involved in the European Commission’s Expert Stakeholder Group to support policy for SMEs seeking to access finance through capital markets.
In 2020, stock markets have enabled companies to access the funding required to avail of the opportunities and surmount the challenges that arose. Euronext is proud to play our part in facilitating this funding solution.