The first auction: Getting Started with Asset Match as a company

Knowledge Base
Wednesday, April 03, 2024

Getting started with Asset Match is simple, but there are a few things it’s useful to know before kicking off. Here we’ll explain how it works for companies looking to implement a liquidity event. 

But first, two quick explainers. 

How does Asset Match Work?

Asset Match runs periodic auctions of private company shares. These auctions are held over a set time-frame in which buyers and sellers can make their orders. 

All buy and sell orders, and the indicative price (the price at which the auction would close if it were to close at that moment), are openly displayed, allowing for a true market price that reflects the supply and demand over the course of the auction period. Once the auction period is over, our pricing algorithm and matching engine determine the final closing price for the auction and the allocations to buyers and sellers. In short, periodic auctions allow shareholders to sell their private company shares for a transparent market price.

Who is Asset Match for?

Whilst there are no set criteria, we tend to facilitate auctions for growth companies that are pre-IPO, private companies that require liquidity but have no plans to exit and companies that have recently delisted from public markets or are making plans to. Again, while nothing is set in stone, these companies tend to have over 50 shareholders and an experienced board of directors. 

Within these categories we work with companies for a number of reasons, from liquidity events for employees or friends and family investors, to cap-table clean ups and share buy-backs.  

Stage 1: Getting in touch

It all starts with a phone call. Or an email. Or a LinkedIn message. However you choose to get in touch, one of our specialists will be able to help you get underway. 

Stage 2: Determine auction type

On Asset Match, companies can trade shares via our Standard Market or a bespoke option that offers greater control over which investors are allowed to bid. Our team will work with you to determine which option works best for you. 

Stage 3: Due Diligence and contract signing

You then complete the application form and sign our Admission and Dealing Agreement. Following that, our team undertakes pre-admission due diligence on each company, which must be approved by our New Business Committee before admission. The New Business Committee is formed of directors and senior managers at Asset Match, all of whom are highly experienced in capital markets.

Stage 4: Review and amend Articles of Association

Standard Market

Review and amend the company’s Articles of Association where appropriate for required transferability. If you haven’t already, you’ll need to switch to an electronic register and make shares CREST eligible. 

Bespoke Market

Review and amend the company’s Articles of Association where appropriate for required transferability. Then document processes and communicate them with any appropriate shareholders.

Stage 5: Upload relevant materials

Standard Market

To alert investors of the upcoming auction, 

We’ll upload any necessary material to your company’s Investor Relations page on the Asset Match website.

Bespoke Market

If you feel it’s necessary, we’ll upload any supporting material to your company’s Investor Relations page on the Asset Match website. It’s up to you how much you disclose.

Stage 6: Set admission price and announce the auction 

First, you set the admission price. This is usually the latest known traded price for the shares (either on AIM / LSE or their own internal market) or an independent valuation done by the company. Then, depending on the market type:

Standard Market

We communicate details of the first auction to Asset Match registered users, inviting them to place an order via your broker.

Bespoke Market

We communicate details of the first auction to the approved participants. 

Stage 7: The first auction

Auctions run for a predetermined period of time, throughout which we manage the auction on behalf of the company and liaise with all participants. This allows you to keep at arm’s length from the process and remain impartial. 

Through the auction, Asset Match uses specifically designed algorithms to match orders, determine their price and allocate shares to successful auction participants. The algorithm identifies the prices either side of where the supply and demand curves and then selects the price which maximises executable volume. In most auctions this is simply the price at which most shares would trade. 

Our algorithm then calculates the matches – i.e. who trades with who – and we arrange settlement.

Want to get started? Contact us by giving us a call on (0)207 248 2788 or send us a message online here.