Week in Review: Is listing the end or the beginning?
By Karamjit Singh August 16, 2013
- One founder is replaced by the board, another celebrates his debut
- Meanwhile, a third CEO begins to execute his high-growth strategy
IT used to be that entrepreneurs would dream of getting their companies listed. That was the big “I made it statement” to the world; the other being a Ferrari.
But that was more than a decade ago, circa 2000, and this was influenced by what was going on in Silicon Valley … especially the Ferrari part.
Today’s group of entrepreneurs in the tech space somehow do not talk about listing with the same fervour as their brethren from a decade past. And it’s not like they have other exit options that are hot. You will probably find more life in a body that has been cryogenically preserved than hope for a trade sale in Malaysia.
(Of course this is a supreme exaggeration on my part. Do not accuse me of being insensitive to the wishes of those who seek immortality.)
The attraction to list as the Holy Grail has probably lost its lustre because it is tough to have to answer for your financial performance every 90 days. It’s no fun.
Just ask Adrian Yong, the founder of data centre provider CSF Group, who recently quit with 24 hours’ notice. The official line was that it was due to health reasons, but it was likely the shareholders lost patience with the performance of the company, listed on London’s AIM (Alternative Investment Market) exchange.
Yong spent over 12 years building CSF. He must be gutted, but that’s how the dice roll when one runs a listed company. And just two months earlier, I had caught up with him when he shared all the exciting developments happening in CSF.
But it does not mean that no one is keen on that route. Going for a listing is also the best way to raise capital and I am very keen to see when Ganesh Bangah Kumar finally goes for his. I am sure he will be busy on the M&A trail again, once he has the proceeds from the listing in his wallet.
And just this week we had Klang Valley entrepreneur Raymond Chee list his company on AIM. As Chee told my co-founder Edwin Yapp, the proceeds will be used for his regional expansion into South-East Asia.
For sure, the pressure will be on Chee to deliver on his promise to shareholders.
Another listed company we featured this week was Cuscapi Bhd, whose name is a combination of the words ‘customer’ and ‘capital’. It has embarked on a journey to transform its business model (coincidently that was what Yong of CSF was doing too before his board lost patience with him) from one that was giving it steady but unexciting growth, to one that it hopes will put it on a high-growth track.
It has spent RM3 million (nearly US$1 million) in developing the software and hardware for its customised tablet solution for the F&B market, and is about to run a five-country trial.
I hope that goes well for the company. If successful, other slow-growing listed tech companies may just start relooking their current growth trajectory and see what Cuscapi has done for inspiration.
However, the high growth path is fraught with uncertainties. Challenges will crop up, mistakes will be made, execution will be uneven, and responding to them decisively will be the key.
But even that may not be enough because you can be sure your competitors are not sitting still and may just have a better strategy than you.
Still, not doing anything is clearly out of the question too, as your shareholders will be baying for your neck then.
It’s all too exciting, isn’t it? Who says the entrepreneurial journey loses its kick when you successfully list?
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