Public Venture Capital

Public Venture Capital 

In the recent trends of capital raising, there is a strong and growing trend for creating what is now known as the public venture capital market ("Public VC").

It started because a lot of governments realize that they need to help the SMEs. By helping the SMEs, they can help them to grow the business, and as a result, they can improve the employment rate and contribute to the economy.

SMEs have always complained that they are very limited routes or difficult for them to raise money. They can go through the angels and venture capitalists route but may not be able to raise a lot of money and it can get very bureaucratic and hard to succeed. Even if you succeed, your hands are being tied down by contracts that make it hard to focus on growing your business.

Public VC is a venture stock market where individual investors, small-cap asset managers and family offices finance early-stage / emerging growth companies. There are a number of public VC markets such as TSXV or CSE at Canada, that allow early-stage / emerging growth companies to be able to raise capital and go public, based on principle-based listing standards (proper disclosure on operating and financials) instead of quantified minimum listing requirements (e.g. min. 300M / 150M market cap).

Raising multiple funding rounds post-public is more common with Public VC, i.e. Private Investment in Public Entity (PIPE).

As a result of going public, companies are able to improve their credibility, their branding equity value goes up, they are seen to be better regulated and governed, and thus are able to raise more money and also globalise their businesses.

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