Many companies approach their exit to an alternative market as a financial process, without understanding the strategic, reputational and governance implications that it entails. This article covers the 10 most common errors that compromise value creation before, during and after listing.
Access to an alternative market — such as BME Growth, BME Scaleup, Euronext Growth or Euronext Access — constitutes a transformative milestone in a company's trajectory. However, it is not a mere financial process, but a strategic turning point that requires rigorous preparation, a solid institutional narrative and a profound cultural change.
The Rubicon Financial Advisors team has participated in numerous transactions in alternative markets and has observed common error patterns that seriously compromise the success of these transactions. This article lists the ten most relevant ones.
One of the most recurring errors is to approach market access as a reactive way to resolve a need for liquidity, without a clear strategic vision that articulates the company's purpose, ambition and roadmap.
The listing must be framed in a narrative of transformation: it is not just a matter of raising funds, but of strengthening competitive positioning, institutionalizing management, attracting talent or preparing for a possible succession.
Companies that don't build a Equity Story coherent and ambitious, aimed at sophisticated investors, they often encounter difficulties not only in the placement, but also in the sustainability of their price.
Access to the market offers multiple advantages beyond financing: the possibility of making acquisitions via exchange of shares, improvement of the reputational and commercial profile, access to new strategic partners, attraction and retention of talent with variable remuneration schemes linked to market value, among others.
However, many companies limit themselves to seeing the price as a specific financial milestone, and not as a structural tool that can enhance the agenda of inorganic growth, internationalization or equity succession.
Wasting these levers clearly underutilises the strategic value offered by the market.
The market penalizes opacity and rewards sustained transparency. Meeting minimum obligations (meetings, annual accounts, significant shareholding) is not enough to generate traction in the stock or to attract new investors.
The lack of Reporting regular, Guidance financial, communication of corporate milestones or proactive relationship with investors severely limits the liquidity of the security and weakens the perception of professionalism.
Quoting requires adopting a culture of permanent and structured communication, oriented to the market and with an institutional vocation.
It is common for the company to structure the capital increase or IPO transaction, prioritizing only its interests: maximizing the amount raised, minimizing dilution or setting an ambitious valuation.
However, professional investors analyze each operation under parameters of expected return, divestment horizon and future liquidity. If the structure of the transaction doesn't offer an attractive risk-return balance, they simply don't come.
Successful transactions are those that align the issuer's incentives with those of the investor, understanding that the relationship of trust is the true asset to be preserved.
The advisory teams that accompany a company as it enters the market are a reflection of its ambition, rigor and professionalism.
Having a Tier 1 or Tier 2 auditing and legal firm provides credibility to the operation, ensures the quality of due diligence and sends a clear signal of internal demand to the market.
Opting for advisors with no proven experience in market processes, or with excessively informal ties with the promoting team, raises doubts about the soundness of the project. The market, in this sense, observes both the actor and the chorus.
A multidisciplinary board of directors, with real (non-nominal) independent directors, active committees and clear decision-making rules, is an almost sine qua non condition in the current context of institutional capital.
The lack of professional governance is often associated with family or foundational businesses that have not yet moved towards an institutional model. This raises concerns among minority investors about potential conflicts of interest, lack of accountability, or risk of unilateral decisions.
The market seeks balance, independence and collective vision. It will not reward an opaque structure, even if the business is attractive.
Credibility is built on execution. Many companies project overly optimistic business plans during the placement process, which they are then unable to comply with. The market severely penalizes these deviations.
The healthiest approach is to Underpromise & Overdeliver: present a realistic plan, with safety margins, and maintain disciplined compliance with it.
In addition, it is advisable to offer Guidance annual (and if possible, quarterly) financial, as well as to publish a three-year strategic plan that allows the investor to systematically monitor the evolution of the business.
One of the most delicate mistakes is setting an excessively high price at the IPO, taking away all the potential for revaluation of the stock. This is usually done with the intention of reducing the founder's dilution, but the side effect is investor frustration and downward pressure on value.
An inadequate practice is to justify the valuation by including the growth that is expected to be achieved thanks to the funds raised in the transaction, without transferring part of that created value to the investor who finances it.
The reasonable thing to do is to set the valuation based on the current situation (pre-expansion) and allow the investor to capture part of the future value as a reward for the risk taken.
Some companies simultaneously grant the same firm the roles of registered advisor, placement bank and liquidity provider. This configuration, although initially comfortable, generates structural dependence and limits the ability to react in case of dissatisfaction with any of the services.
In practice, many companies are trapped in contractual relationships that are difficult to break without reputational or strategic consequences. The ideal is to have a specialized, diversified ecosystem of advisors without cross-conflicts.
Preparing for an IPO can consume time, resources and attention from the founding team. In many cases, this results in a temporary drop in operating performance just before or after trading.
Subsequently, it is common to see how the founder becomes obsessed with the daily evolution of the price or with the liquidity of the stock, instead of focusing on continuing to generate operational value.
The quote should not replace the business. Companies that focus on executing, communicating clearly and cultivating market confidence tend to see how stock valuation progressively converges with their intrinsic value, albeit with some temporary latency.
Access to an alternative market is an extraordinary strategic opportunity for those companies that are prepared to act with institutional maturity.
Avoiding these ten mistakes doesn't guarantee success, but it does lay the foundation for a solid, lasting and profitable relationship with the market.
Because in capital markets, as in life, Reputation is built slowly, but it can be lost in a single poorly executed exercise.
