These are certainly robust times in the public markets, as investor demand in high growth sectors such as e-commerce, health tech and CBD products continues. TSX and TSX Venture Exchange provide a unique opportunity for Austin companies to consider “public venture capital” as an alternative to private capital options.
For US companies seeking Series B+ growth capital, here are a few things to consider:
- Know your funding options. There are many sources of growth capital available to US companies, including angel investors, venture capital, private equity, venture debt, equity crowdfunding, the over-the-counter (OTC) public market, and senior stock exchanges Nasdaq and NYSE. And there is “public venture capital” on TSX and TSXV. Be clear on what you are building and why, and evaluate the pros and cons of each option. Consider these factors: cost of capital (debt versus equity), maintaining control, alignment with the long term vision for the company, time and cost of reporting requirements, and value-add that comes with the capital (contacts, advice, industry expertise).
- Understand public venture capital. Learn about the uniqueness and opportunity in public venture capital and the potential benefits of using the Canadian public markets to grow your company. Rather than taking on the potentially onerous terms of private equity or venture capital, consider that you can likely maintain greater ownership and operational control by going public on TSXV.
- Have a reason to go public. Ensure your company would benefit from being public, including access to capital acquisition currency incentive for attracting and retaining top talent through stock options diversified shareholder base and flattened cap table and the credibility and profile of being listed on an internationally recognized stock exchange.
- Focus on long term growth. Once public, the most successful CEOs focus on executing the company’s business plan and less on watching the stock price. It is critical to manage investor expectations by communicating your company’s long-term strategy and by investing in quality investor relations.
TSX and TSXV are a unique funding and listing platform for high growth US companies looking to raise Series B+ capital. Companies with early revenue, a strong management team, and a growth strategy to eventually list on a US exchange should consider the Canadian capital markets as an alternative that may be the right fit.
I am based in Orange County, CA and can’t wait until I can get back to Austin. In the meantime, I look forward to discussing these finance options with you virtually!
VP, US Capital Formation