Local shares for local people

A stock exchange for Birmingham businesses is bucking the travails of global finance.

Last Updated: 31 Aug 2010

InvestBX, run by Sue Summers, is an online share trading platform aimed at businesses in the West Midlands. It raised its own start-up capital - £3m – via a handy government grant (public sector money is so much more reliable in these troubled times) and the target market is firms looking for investments of  between £500,000 and £2m.

InvestBXs first flotation was back in February, indoor go-karting business Teamworks Karting, and it must be one of the only share markets in the world which can say that none of its share prices have fallen in recent weeks. Admittedly, trading is not undertaken in real time but rather by regular auctions at which buyers and sellers who have registered online are matched.

It’s early days yet, but if the credit crisis continues to gain momentum at its current rate the regional stock exchange could become a very popular model. As well as allowing business people to support their local community in a very direct way, the concept has systemic benefits too. It should provide a ready and affordable exit-route for wealthy business angels, encouraging them to make more investments boosting the local economy accordingly. Summers says that raising £2m on InvestBX costs about 10%  -– as opposed to some 25% on the AIM market.

It’s not a new idea – there were regional exchanges all over the UK until as recently as 1973, when 11 such organisations were subsumed into the LSE. But the parlous state of the global markets has seen the local model rise to the fore again, with plans mooted for similar set-ups in Cardiff and also Lancaster, Pennsylvania. Depending on how InvestBX gets on, of course.

So if your business is based in Brum and you could do with some capital, check out www.investbx.com. And if it is not, maybe now’s the time to think about starting your own local stock market. In the future, investment – like charity – may begin at home.

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