Alternativa

A solution for mobilizing capital

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SE Sweden
Web http://www.alternativa.fr/
Maturity

Mature

About the project Edit

Alternativa is a solution for mobilizing capital that is a lot more affordable than the classic stock exchange listing. Introduction fees are very limited (10,000 euros for an audit of eligibility + 10,000 euros in annual commissions). The company choses the negotiation frequency of its securities (from monthly to annually). The rating occurs once a month for a week and the platform sets a balanced price.

This week of trading is a major innovation that ensures a slow rating: two days are devoted to price discovery (securities or valuation by independent experts). Over the next three days, purchase orders and sales are recorded based on the fixed price. Alternativa then sets up a balanced price and delivers the securities.

Finally, the traded companies on the platform are much smaller than Alternext or other SME stocks with their valuation from 1 to 8 million euros.

Themes

In what ways is this project unique and creative? Edit

Alternativa is a much more affordable solution for raising capital than the traditional stock exchange listings. The costs of introduction are very limited (10,000 Euros). Above all, the company chooses how frequently it trades its securities (from monthly to annualy). The listing occurs once a month for a week and the platform sets an equilibrium price. Posting a listing for one week is a major innovation that ensures a slow listing - two days are spent on learning about prices (auctioning of securities or expert valuation). During the next three days, purchase and sale orders are collected based on the set price. Alternativa then sets the equilibrium price and delivers the securities.
Finally, companies listed on the platform are much smaller than those on Alternext or on other SME stock exchanges, their value ranging from 1 to 8 million Euros.

What is the social value of this project? Edit

Alternativa is a platform for negotiation between project promoters and local investors. With this in mind/In view of this, it can be considered as a tool for social and economic cohesion since its link with SMEs requires more shareholders and partners in a joint project.

Therefore, Alternativa allows smaller companies seeking to finance their development to get prepared in a non-regulated setting that's more easily accessible and less restrictive. The platform allows venture capitalists to liquefy their investments by facilitating exit strategies. It puts an end to the near-monopoly of traditional stock exchanges, while meeting the needs of investors who are seeking to fund a sustainable growth of small companies and to ensure the liquidity of their assets.

Above all, Alternativa seems to favour long-term investments through an innovative rating system that ensures slow formation of prices and restrictions through encouraging investors to hold their shares for at least five years in order to take advantage of substantial tax deductions associated with the TEPA Act passed in France.

In fact, such action ''democratizes'' access to the stock market by reducing the entry barriers. It is therefore a way of providing easier access to SMEs whose savings are managed by investment professionals, which should reduce the risk of stock market speculation and excesses (which are traditionally associated with the full opening of conventional stock markets to short-term private investors). The controlled period of confrontation between supply and demand of securities (one week) counts as a guarantee against anti-speculation. In this sense, the Swedish model of a funding platform is seen by some people as an alternative to historical finance practices.

What is the potential of this project to expand and develop? Edit

As long as the platform obtains funds from the transactions (1% of the amount from purchase transactions and 4% from sale transactions), its business model seems to be proven. It requires only a small number of transactions. Moreover, Alternativa operates in Sweden, where the model was initially launched with only 20 to 25 listed companies and the initiative has already led to the emergence of a second platform competitor.

What was the triggering factor of this project? Edit

ALternativa was born in Sweden, in 2003. Having been President of the stock exchange of Stockholm, Carl Johan Högbom notices that the big traditional stock exchanges are not adapted in small & medium size firms and create Alternativa Stockholm. Hardly of this first success Alternativa pursues its development in France in a fiscal context more attractive than in the other European countries.

The mechanisms of market of Alternativa are approved by the AMF (Authority of Financial markets) and by the ACP (Authority of Prudential control) described in the document of general information. They favor the liquidity and guarantee an equal treatment of the transactions for all the carrier

What is the business model of this project? Edit

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