Archived — Initial Public Offerings: Status, Flaws and Dysfunctions
Small Business, Tourism and Marketplace Services
Small Business and Tourism Branch
Access to public financing is a key factor in the development and growth of businesses. This stage enables a business to benefit from a permanent source of capital and reduce its equity costs. This is especially important in a knowledge economy where the intangible nature of major assets limits the use of debt financing. The development of a method of exit for venture capital investors and a dynamic stock market are other arguments favouring the stimulation of primary offerings. The primary issues market is thus essential for businesses mature enough to make use of it, but also for more junior businesses because it helps to improve early-stage financing conditions.
Over the past two decades, various initiatives have been launched by governments and self-regulating agencies to facilitate public financing of new businesses in Canada. The Quebec Stock Saving Plan, stimulation of the venture capital supply, the gradual relaxing of minimum standards for stock market listings and the Capital Pool Companies program all flow from this desire to facilitate the public financing of growth businesses.
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