FirstPEX, Europe’s first online platform for private company shares is now open to European investors. This was secured by LPO Ventures, the Swiss technology firm running FirstPEX, forming a strategic partnership with FSA-regulated Autumn Capital Partners, a leading UK boutique financial consultant and investment advisor to hedge funds. LPO Ventures is now an Appointed Representative of Autumn Capital.
Until this deal was completed, only Swiss investors could register on the platform, but now, under the European Union’s passporting rules, FirstPEX’s platform is open to investors across Europe.
Since the site’s launch, more than 100 companies and investors have registered for the platform, including some businesses with sizeable market capitalisations, such as one Austrian engineering company, which has a valuation of around Euro 100 million.
FirstPEX is being billed as Europe’s answer to SecondMarket or SharesPost, the very successful US secondary platforms.
These sites are providing a marketplace for stakes in well-known companies, such as Twitter and Facebook, which have yet to IPO but have attracted an enthusiastic following among investors, and were home to top corporate names, such as LinkedIn before it went public. In the US, a significant portion of sell-side trading volume has originated from employees and ex-employees of these high profile private companies.
Last month seven-year old Second Market allowed its own shareholders to sell around £8 million worth of SecondMarket stock, which valued the business at around £100 million ($160 million).
The growth potential for FirstPEX is similarly significant. Private company shares from all EU countries, as well as from Asia and the Middle East, may be offered on the site.
European, including UK, private businesses, have an aggregate turnover of Euro 9 trillion, account for close to 10% of EU GDP and employ five million people. Some of the EU’s biggest companies are also private, such as Boots Alliance, Ikea and Bosch.
In the UK, the prospects are promising, with the UK home to some 200,000 family and entrepreneur-led private companies. Though initially firms registering on the site are likely to be SMEs or medium-sized businesses (MSBs), the platform is also open to larger private companies and many of the best known corporates, such as Pret A Manger, Dyson and Phones 4U (examples in the UK), are still private.
As a platform where companies and investors can meet, FirstPEX also gives companies an opportunity to reach investors — providing a possible solution for SMEs and MSBs currently hit by the extreme tightening of bank lending, a lack of venture capital and the shortage of sufficient capital among angel investors.
FirstPEX offers a flexible, transparent and low-cost system of payments. Companies may list their core information on the FirstPEX platform free of cost for an initial period. There are two options of paid memberships for companies and business owners, which intend to upload more detailed analysis for viewing by investors over longer periods: £68.50 (CHF 99) for a 60 day period or for those which want to leave their details for an open-ended period up until funds are raised, pay only £137 (CHF 199)
For investors the site is membership based and inexpensive with a charge of only £20.50 per month (CHF 29). For any completed transaction, FirstPEX levies an introduction fee of 1.75%.
Patrick Gruhn, founder and Chief Executive of LPO Ventures, commented: “I am delighted that LPO Ventures and Autumn Capital Partners have agreed this joint venture, allowing European investors access to FirstPEX. This gives European investors the chance to participate in the exciting opportunities of investing in fast-growing private companies that the platform offers.
Businesses in Europe have, since launch, been able to register on the site and with the dearth of bank lending to small and medium sized businesses a critical stumbling block in economic revival, I hope investors on FirstPEX will be able to play a strong part in helping private companies get funding.
Autumn Capital Partners brings to our venture a wealth of experience and expertise with a range of different types of investor, with a particular focus on alternatives, and I am sure will play a strong role in significantly increasing investor participation on the site.”
Kevin Cook, founding partner of Autumn Capital Partners, commented: “We think FirstPEX has a fantastic opportunity to become Europe’s answer to the highly successful US sites, Second Market and SharesPost. Given the lack of a European IPO culture among mid-sized business and the extreme contractions in European banking activity, the potential could actually be greater.
We are very pleased to be a partner in this joint venture and are confident that, in addition to our regulatory umbrella, we can bring experience, investors and resources to help build FirstPEX into the leading European platform for the origination of private transactions.”
About LPO Ventures
LPO Ventures is a Swiss-based technology company whose founders also created The Elevator, an elite private equity publication that recently celebrated its 5th anniversary. (the-elevator.com)
The build was supervised by London-based digital development agency DD&AG, whose clients include some of the world’s largest publishing and media companies.
About Autumn Capital Partners
Autumn Capital Partners (autumncapital.com) is a financial consultancy firm specialising in the creation and development of financial businesses and hedge fund products. Autumn currently advises clients with assets in excess of $20bn. It is authorised and regulated by the Financial Services Authority (FRN: 534573).