By Joseph A. Giannone
SAN FRANCISCO (Reuters) - London's AIM stock market has aggressively wooed new listings from start-ups worldwide, taking business from U.S. exchanges, but venture capitalists see it as a lesser choice.
AIM has become an alternative source of expansion funds, but lacks substantial trading volume, or liquidity, that new firms and their sponsors want, they said.
Norwest Venture Partners Managing Partner Promod Haque told the Reuters Venture Capital Summit that for many start-ups based in India and China, listing in the United States now may be too difficult and not worth the risk.
"It would be brain damage to try to list here (in the United States), said Haque, who invests in several Indian start-ups.
"The barriers are very high," he added, referring to regulatory and other issues. "We're much better off listing those companies in Mumbai."
AIM presents an option for companies eager to keep expanding, but it doesn't yet measure up to the Nasdaq Stock Market (NDAQ.O: Quote, Profile, Research, Stock Buzz), he said.
"It's a nice place to raise money in the late-stage round, but it has no liquidity," Haque said.
AIM, a unit of the London Stock Exchange (LSE.L: Quote, Profile, Research, Stock Buzz), has made headlines over the past year by encouraging small companies from around the world to float their shares in London rather than on Nasdaq, long the marketplace of choice for start-ups worldwide. Continued...
© Thomson Reuters 2008. All rights reserved.
| Paper | Aug 20 - 21, 2008 | Manufacturing |
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
