Guide
Growth Boards for Tech Companies Compared
Many technology companies go public before they are large or profitable. Most stock exchanges have a separate market for them, often called a growth board or growth market. Its rules are lighter than the main market's, which makes listing cheaper and faster, but it also means investors get less protection and less information.
What makes a growth board different
Compared with a main market, a growth board usually has:
- lower or no minimum company size and free float;
- an appointed adviser or sponsor who checks the company instead of a full review by the exchange or regulator;
- lighter reporting, for example half-year instead of quarterly reports;
- fewer and smaller investors, so lower trading volumes and wider spreads.
The main growth boards compared
| Board | Exchange | Started | Notable feature |
|---|---|---|---|
| AIM | London Stock Exchange | 1995 | Nominated adviser (Nomad) required; shares exempt from UK stamp duty |
| Euronext Growth | Euronext | 2017 (as Alternext from 2005) | Listing sponsor; lighter reporting |
| First North Growth Market | Nasdaq Nordic | 2006 | Certified Adviser required; very active in Stockholm |
| Scale | Deutsche Börse | 2017 | Segment for small and medium-sized companies |
| Growth Market | Tokyo Stock Exchange | 2022 (replaced Mothers) | For high-growth companies |
| STAR Market | Shanghai Stock Exchange | 2019 | Registration-based IPOs; ±20% daily price limit |
| ChiNext | Shenzhen Stock Exchange | 2009 | Innovative growth companies; ±20% daily price limit |
| KOSDAQ | Korea Exchange | 1996 | Technology and biotech companies |
| GEM | Hong Kong Exchanges | 1999 | Smaller growth companies |
| TSX Venture Exchange | TMX Group | 1999 | Early-stage companies in Canada |
Europe: adviser-led markets
London's AIM is the oldest of the European growth markets. Instead of a detailed review by the regulator, each company must keep a nominated adviser, a firm that confirms it is suitable for AIM and helps it follow the rules. AIM shares are exempt from the 0.5% stamp duty that applies to most UK share purchases.
Euronext Growth and Nasdaq's First North work in a similar way, with a listing sponsor or certified adviser. Stockholm's First North has been one of Europe's busiest markets for small technology listings. Deutsche Börse's Scale segment serves the same kind of company in Germany.
Asia: registration systems and price limits
China's STAR Market, launched in July 2019, introduced registration-based IPOs to the mainland: the exchange reviews whether disclosures are complete, rather than the regulator judging the business. STAR and Shenzhen's ChiNext allow prices to move up to 20% a day, double the 10% limit of the main boards. Individual investors need a minimum amount of assets and trading experience before they may trade these shares.
Tokyo restructured its markets in April 2022 into Prime, Standard and Growth. The Growth Market took over from the former Mothers market. Korea's KOSDAQ has long been the home of Korean technology and biotech companies, while Hong Kong's GEM serves smaller companies alongside the Main Board's special chapters for biotech and specialist technology firms.
Risks to keep in mind
- Liquidity. Fewer trades mean wider spreads; selling a large position can move the price.
- Information. Lighter reporting means you know less about the company between reports.
- Dilution. Young companies often raise new money, which spreads profits over more shares.
- Volatility. A single contract, trial result or funding round can move the price sharply.
None of this makes growth boards a bad place to invest, but it makes research and position size more important.
How to find out where a company is listed
Each company's own investor relations page states its listing and segment. On this site, every exchange profile lists its boards and segments, for example Euronext, the London Stock Exchange and the Shanghai Stock Exchange. The comparison tool puts the boards of several exchanges side by side.
Sources
This guide explains how markets work; it is not investment advice. Check current rules with the exchange or your broker.