Although hi-tech IPOs have become bigger, and easier for companies to do, early stage financing can still be tantalizingly difficult for a start-up to lay hands on. Money is available for the right company with the right product, but smaller companies in particular can find the procedure tortuous and the expense involved disproportionate to the amounts they need.
In circumventing at least one of these problems Argo Interactive, a company based in Chichester, UK, which specializes in internet software tools, has proved to be as imaginative in raising finance as it has been in developing software. In the past two years it has raised external financing on three separate occasions, in the process becoming, so it believes, the first company in Europe to have offered a share prospectus on the internet, as well as in traditional printed form.
In September 1996 it launched the first of two equity tranches which together raised £600,000 ($336,660) and attracted over 300 shareholders, says Ian Goodall, sales and marketing director. In the next financing Argos raised £1 million of growth capital from venture-capital group 3i to support the company's strategic sales and marketing of its key software tool, Nectar.