Thinking About PISCES? The Questions Our Clients Ask Most

This is usually the first objection, and it is a fair one. A PISCES trading event creates liquidity for existing shareholders. It does not bring new capital into the business. Founders tend to be focused on raising new money, so being asked to take on a listing for the benefit of an early investor can feel like all cost and no reward.

The conversation usually changes once the benefits to the company and its people are clear. Where a company has an EMI or CSOP share option scheme, a PISCES trading event can count as an exercise event (provided the plan documents allow it). That means employees can turn options into cash without losing their tax advantages. Founders can take some money off the table without a full exit. In one listing we were involved in, part of the motivation was to let the founder and early family and friends shareholders release value that had been tied up in the company for years.

There are wider strategic benefits too. A listing introduces the company to a more institutional class of investor, which matters if its cap table has so far been a single fund plus friends and family. It is also a gentle rehearsal for a future IPO, as it gets management used to disclosure without the full weight of a public market. Some companies combine a PISCES event with a primary raise, which can make the whole exercise more attractive to the board.

For a sought-after company, buyers may already be queuing up. Even so, there are good reasons to run the sale through a regulated market. Institutional buyers can purchase through their usual broker and hold the shares electronically, with settlement through CREST, rather than dealing with paper stock transfer forms. Share transfers in connection with PISCES trading are exempt from stamp duty and stamp duty reserve tax. Employees can exercise options while keeping their EMI tax benefits. And the whole process runs within a formal framework, using controls the company sets.

We are seeing advisers increasingly steer clients towards this route rather than an informal search for buyers.

The regulatory bar is low. Any company whose shares are not traded on a public market anywhere in the world may qualify, including companies incorporated outside the UK. The practical bar is higher. For a meaningful secondary sale, operators look for revenue-generating businesses with a trading history, and ideally positive EBITDA, because buyers need confidence in what they are buying. No fixed profit threshold exists, and sector matters: fast-growing businesses in areas such as healthcare and AI have found buyers while only marginally profitable.

Not every listing is about a large sale. Some companies list for technical reasons, for example, to establish a reference price for a tender offer or another corporate action.

The usual starting point is the price of the last funding round or an independent third-party valuation. Fund managers sometimes worry that a market-driven price could differ sharply from the value they carry the holding at. In practice, sellers and the company often agree a price, or a narrow range, before buyers are approached, and any negotiation happens within it.

The company stays in control. It can set who may sell, how much, the price parameters and the trading windows. If there is concern about the effect on future funding rounds, the event can be run privately, with pre-approved buyers and sellers and no visible trading history.

Yes, though it is usually lighter than for a primary round. Information is gathered into a data room for buyers to review. The bigger the ticket, the more a buyer will want to speak to management; investors taking smaller amounts are often content to be more passive.

The feedback can be valuable in itself. In one case, institutional investors flagged that the company relied heavily on a single product, a useful prompt as it prepared to launch another.

Less than many expect. Onboarding largely reuses information the company has already given its investors, and the ongoing disclosure burden is modest. It is far lighter than a listing on a public market such as the London Stock Exchange.

The biggest practical lesson from our own experience is to get the company's house in order first. Filings at Companies House should be up to date, statutory registers accurate and the articles properly amended. In one listing, gaps in the company secretarial records took several late nights with lawyers to put right. A company that keeps good order internally will have a much smoother journey.

Costs vary by operator and are often negotiable. As a guide, operator fees start from around £15,000 a year, often paid monthly, and can be higher depending on the company and the transaction. That compares very favourably with the cost of maintaining a public listing. There is also a transaction fee, which is usually charged to sellers rather than buyers, to avoid putting buyers off.

For fund managers, a practical question is who pays. If the sale mainly benefits the fund, the company may be reluctant to cover the cost, so the selling investor should be prepared to bear it. Legal, valuation and adviser fees may also apply.