Why Invest in Unlisted Companies?

November 2021

You only have to look at successful unicorn companies to see why early relationships and
investments can offer mind blowing returns. If you invested $10,000 in Amazon’s IPO in 1997 with
the share price at $18 per share, your investment would be worth $12 million as of May 2020. That’s
a growth of 120,000%. And this company, as well as Australian examples such as Canva and
AfterPay, sought investment as they grew from startups to IPO. Perhaps risky but imagine the
The IPO market does more than connect companies to capital. For investors, IPOs can be a window
to some of Australia’s most exciting companies. And for companies, it’s a source capital with which
to invest and grow. Other benefits include the addition of new shareholders, stronger company
profile and continued access to capital.
What we love about the unlisted space is the opportunity to identify and support companies well
before they list on an exchange allowing us, and our investors, to buy its shares and watch it grow
over many years. We can even support their growth journey with advisory services and access to
influential industry experts. We seek to identify winners, and connect them with our strategically
aligned investors. If your business is growing and requires capital to supercharge that growth then
get in contact with me to see how we could help. If you’re an investor, keen to invest alongside us in
high growth companies please connect with me.
Many of our capital raising clients will look at exit at some point but not all private companies want
to list even if they could. And some may want to list, but they are not good candidates. We can help
work with you to investigate the best option for your company.

Bell Potter’s Cyril Jinks highlights his 5 most important factors for a successful IPO:

  1. Alignment. The best IPO’s hands down are where vendors are not using the IPO as a
    selldown but for growth capital
  2. A large addressable market still to be achieved . Large is good but global is better .  Witness
    Afterpay , Appen , Wisetech ,
  3. Wonderful unit economics – high gross margins simply mean lower volumes pf sales will
    deliver greater profit long term
  4. A clear and well-articulated vision. A CEO and CFO who can articulate their point of
    difference and how they derived at their strategy.
  5. The right construction of shareholders who are backing the long term vision and not a short
    term hustle .

One of our capital raising clients who have all the makings of a great IPO is The Blue Space. CEO Les
Patterson has all the hallmarks of a founder with great competency and opportunity that will lead
the company to a successful IPO. We believe it is achievable within the next 12 – 18 months.
Relationships developed while companies are unlisted help us understand the value proposition of
these companies when they’re listed. Cyril Jinks, for example, has enjoyed significant success with
listed stocks from his involvement in their journey from unlisted to public company. Examples

  • Appen
  • Healthia
  • National storage
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