The report by Nikkei Review states that companies could list on the very day they are established, without any record of earnings
Benjamin Tan 5 Dec, 2016
This article was first published on e27
For most startups, the early months of their inception is about building their Minimum-Viable-Product (MVP) or finding the right product market fit.
But for startups in Thailand, they have the option to go public right on day zero.
Say what? Yes, you did not misread anything.
Thailand is launching a new stock exchange catered specially to startups, according to an exclusive interview with Kesara Manchusree, president of the Stock Exchange of Thailand (SET) by the Nikkei Asian Review.
The new exchange will be unlike Thailand’s two existing stock exchanges — SET and mai — which are tightening its regulatory rules and other criteria amidst a surge in listings, in part due to second- and third-generation family businesses seeking to go public. The proposal for the new exchange is still being drafted, but the expected roll out will be in the third quarter of 2017.
Startups can list on the new exchange even if they have not earned any revenue. They can choose to issue equity and non-equity products including bonds and options. It may, however, be limited to accredited investors, but that detail has not been finalised.
Naturally, the volatility of stocks of untested startups is high; an investor might be able to reap two to three times the initial investments or lose them all together. Investors could also receive dividends in the form of company products or other benefits instead of cold hard cash, they may also become board members in some cases.
Besides this startup-focussed stock exchange, the SET will also be launching a new index for other smaller cap companies called sSET. These companies will be vetted based on their stock’s liquidity and free float. It is expected that around 100 companies will be listed on this index when it is launched in January 2017.
So for startups looking to incorporate in a Southeast Asian country, Thailand might be a wise and attractive choice.