Funding innovation with earlier stage IPOs or venture capital: Australia compared with the U.S.

We compare earlier exchange public listing with venture capital (VC) financing as a source for startup funding. We describe how early-stage ASX IPOs have increasingly substituted for the longer private financing and correspondingly later IPOs that have increasingly become the U.S. norm in the last five to ten years. We attribute the ASX’s growth success in part to the financial ecosystem that supports the launch of still-early-stage companies into the standardized ASX marketplace. We show that small/microcap ASX listings that are “easier to value” with a lower level of potential information asymmetry – primarily mining & metals --- tend to list earlier. We confirm that the early Australian listings are not driven by regulatory discontinuities over time, and also discuss how SPACs contain some of the features of early-stage ASX IPOs that in earlier Australian renditions were known as Cashboxes.