Financial trade groups have started to lobby the European Commission to implement changes that helped to bring about the US biotech IPO boom. What the European IPO Task Force specifically wants is for politicians to slash the regulatory and administrative cost that is involved in going public by as much as 50%. This would help more small companies to stay afloat.
They have identified cost as one of the main reasons that companies haven’t been going public. Together, EuropeanIssuers, the European Private Equity and Venture Capital Association and the Federation of European Securities Exchanges (FESE) have figured out that up to 10% of an IPO that raises less than $55 million is taken up by fees. And that this keeps the little guys from going public.
They argue that current legislation is designed around the top 10% of companies. They want a 50% reduction in fees and they want small companies spared from certain requirements. As Philippe de Backer, a Belgian Member of the European Parliament, said “Although Europe continues to build and grow businesses with the potential to be world class the failure of the IPO market to facilitate their access to capital hampers their growth and ultimately their potential to create jobs.”
