Abstract

As young ventures are not yet profitable and lack a track record of historical performance, private equity financing is usually the only remaining option. This paper argues that it is important for venture capitalists to have access to capital markets, and that the existing regulatory environment and high listing and compliance costs in the U.S. seem to discourage venture capital investments and, by extension, new innovative companies in general. Specifically, the paper considers reasons for many companies to prefer raising capital on the Alternative Investment Market (AIM) in the U.K.

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