The creation of venture exchanges has sometimes been proposed as a way of facilitating capital formation for smaller, growth-stage companies. The concept usually entails:
- A public trading venue (open to individual retail investors and functioning as an exchange, with some transparency in pricing);
- A commitment to smaller, growth-stage companies;
- The ability for existing investors to sell their shares to new investors on the exchange; and
- The ability of the issuer to raise capital in connection a decision to list the shares for secondary trading.