While AIM investments are viewed as riskier than those on the Main Market, the tax incentives on offer can make them more attractive. While there are clear risks associated with [investing in growth businesses, it is the excitement and volatility of the AIM market that attracts many younger investors a recent survey conducted by TD Direct Investing reports that the AIM index has more than three times as many 30–44-year-old investors than those in the 45–75 age group. Trading on AIM accounts for up to a quarter of all trading done by private shareholders. In fact, over 250 companies listed on AIM are from outside of the United Kingdom, making it proportionally one of the most diverse exchanges in the world. The companies on AIM are spread across 37 different sectors (90 different sub-sectors) and come from 26 different countries. This list includes ASOS, ABCAM and Fevertree, all of which have delivered significant returns to investors who invested early on. And, while many companies use AIM as a springboard to the main market (over 150 companies have made the move), there are still a few companies listed on AIM with market capitalisation of over £1bn. While this may seem small, there have been some notable larger raises that exceed £100m. What companies list on AIM?Ĭompanies looking to float on AIM typically look to raise between £1m and £50m via IPO. AIM does not have these requirements which means that smaller, more entrepreneurial companies are less likely to be put off by floating on AIM. The Main Market requires companies seeking to float to have existed for three years, to have a market value of at least £700,000, to be willing to float a minimum of 25% of their share capital, and to have enough working capital for at least one year’s trading. I understandĪIM was created to serve smaller companies that sought to seek capital to grow but couldn’t afford the costs associated with listing on the London Stock Exchange’s Main Market or could not meet the stringent requirements needed to float. If you are interested in learning more about how to protect yourself, visit the FCA’s website here. These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.Most start-up businesses issue multiple rounds of shares. This could mean that the value of your investment reduces, depending on how much the business grows. The percentage of the business that you own will decrease if the business issues more shares.The value of your investment can be reduced A good rule of thumb is not to invest more than 10% of your money in high-risk investments.ĥ.Spreading your money across different investments makes you less dependent on any one to do well.
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