Morning Startup – Perth
Wednesday, March 25 at 7:30 AM
Is Back Door Listing your startup on the ASX a good idea? (Expert Panel) – Hear from those that do it, and have done it – The whys and wherefores …
400M-1M a year plus upfront to be on the ASX
CEO willing to take phone calls
Continuous news/deal flow. Otherwise “gravity” kicks in
Value of the shell
Value of the vendor
Due diligence on both – vendor has to be audited
Raising – $4-20M
IPO – 300 shareholders on the register
RTO – existing shareholders
RTO – seed capital gets existing shares. Takes around 6 months
IPO – lose the $150ish K in the seed. Takes around 3 months.
An RTO is NOT an exit
All shareholders in the vendor can’t sell for 2 years. You usually won’t get cash back as a founder, usually equity. Best to base this on reaching milestones.
Be very careful about the directors selling shares – it will attract media attention
You want the cash/benefits of being a public company. You won’t remain a nimble startup
After an RTO: directors have around 12 months to execute
RTOs are unusual overseas – especially the USA. In Aus there’s a lack of money and education, plus there’s a higher share holding rate. Mining tends to be creative in how they raise money. In Perth there’s a history of people making money going from mining – tech – mining – etc.
IPOs are making a comeback but there’s plenty of mining shell companies and they are getting cheaper. It’s a great time given the mining slowdown.