Direct market plus as an IPO alternative for startups and SMEs

Accredited Direct Funding Partner

Since January 2019, it has been easier for SMEs and later-stage startups to be listed on the Vienna Stock Exchange. But what are the advantages, what are the requirements, what are the consequences and where is there support on the way to a listing? Konsultori is pleased to support you as an accredited Direct Funding Partner.

The new direct market plus segment for SMEs and startups

If you are a public limited company with a low double-digit number of shareholders or a startup in the growth phase (after the initial expansion phase is well over) and are looking for more publicity and access to additional investor groups, it is now a little easier than before January 2019. The Vienna Stock Exchange joins international markets such as NASDAQ in the USA, AIM in London, Euronext in Brussels or Nasdaq Nordic in Stockholm. There, technology-driven, smaller companies dare to list on the stock exchange. In the German-speaking countries, there was the Neuer Markt in Germany in the past, but it had to close again.

The new segment “direct market plus” as part of the stock market of the Vienna Stock Exchange has become possible due to the amendment of the Stock Corporation Act. The advantage for entrepreneurs is easier and cheaper (5,000 EUR for listing, 1,000 annual fees) access to the Vienna Stock Exchange. The new segment enables the entry into the capital market for SMEs and fast-growing young companies/startups in a later phase. At the same time, this first listing offers a good springboard for more capital and growth in other segments.

At the start of the “direct market plus” a total of eight companies were on board, four of them new to the Vienna Stock Exchange: startup300 AG, EYEMAXX Real Estate AG, VST Building Technologies AG, and Wolftank-Adisa Holding AG. You can see the performance of the direct market plus listing here.

Tips and our approach

Background information on listing on the direct market plus

Why is access to the “direct market plus” easier?

Compared to the EU-regulated market, the entry requirements and follow-up obligations for listed companies are lower, as are the costs of listing. Here is the comparison:

• Minimum duration of the company: 1 year for direct market plus, no regulation for direct market.
• Annual financial statements, semi-annual report, company calendar: only required for direct market plus, but not for direct market.
• Obligation to comply with ad-hoc publicity, keeping insider list and managers’ transactions according to MAR.
• Access with or without prospectus
• No minimum size
• No minimum market capitalization
• No minimum placement volume

What are the advantages of “direct market plus” for SMEs and startups?

• Shares become tradable in an uncomplicated way.
• Own investors are given a gradual exit option.
• There is the possibility of gaining access to new investor strata.
• The company valuation is transparent and enables existing shareholders to evaluate the company.
• The first step for a later capital raising becomes possible.
• The company gets increased visibility in the public (with customers and suppliers).

What are the entry requirements?

• The company has a minimum holding period of 1 year (direct market plus)
• The corporate form is an AG with a minimum number of shareholders in the low two-digit range
• An information memorandum provides the transparency required for a listing
• Evidence of a compliance process within the company

Where can SMEs and startups get support before listing on the Vienna Stock Exchange?

The Vienna Stock Exchange makes sure that companies in the ecosystem also receive support. For this purpose, the direct network of the Vienna Stock Exchange was established. It includes investment banks, capital market coaches and direct funding partners.