The IPO is the first time a company approaches the public capital market to finance its business by selling shares at the stock exchange. IPO provides the right option for companies wishing to avoid dependency on a select few private investors.
There are two ways to gain access to capital markets in Germany:
- The Regulated Unofficial Market or Open Market (Freiverkehr), offers an appropriate first entry point for small or recently founded companies.
- T he Regulated Market (Amtlicher Markt), governed by EU regulations, requires higher entry, reporting, and transparency standards.
! Germany‘s most established stock exchange is the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse - FWB), which is the third largest in the world. In addition, there are seven exchanges which concentrate on local or sector-specific markets:
- Berlin Stock Exchange (Börse Berlin)
- Stuttgart Stock Exchange (Börse Stuttgart)
- Hamburg & Hanover Stock Exchange (Hamburger Börse)
- Munich Stock Exchange (Börse München)
- Düsseldorf Stock Exchange (Börse Düsseldorf)
- Commodity Exchange Hanover (Warenterminbörse Hannover)
- European Energy Exchange Leipzig
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Cash Incentives
Investors can call upon a wide range of public funding in Germany. There is a large selection of programs available which are designed to support business activities at all stages of the investment process.
One of the main instruments are cash incentives usually provided in the form of grants. Promotion rates can account for up to 50 percent of investment costs. They are usually regarded as equity by financial partners.
Other public funding instruments, such as interest reduced loans, are usually debt oriented.
