In case you haven't noticed, Thailand is becoming the silicon valley of ASEAN, and I am sure you have noticed. To not would be the equivalent of not noticing the massive elephant on your elephant tour.It seems the Thai government and organizations within the country happy to have this title as well, and seem to promote it well. So it should come as no surprise that there is always startup news coming out of the country. However, the big news on the block today has been the Stock Exchange of Thailand's announcement to create a stock exchange specifically catered to start ups. Kesara Manchusree, president of the SET, says that the move can be a huge boost to Thailand's already bustling start up crowd. It gives start ups struggling a chance to a chance to go from "Zero to Hero", says Kesara.
The stock exchange for startups will be an addition for Thailand's two exchanges. the first tier SET, and the second tier Market for Alternative Investment, or MAI. However, Kesara pointed out that the proposal will have "completely different regulations... We wish to create a new bourse not a third bourse."
The idea of creating a "stock exhange for startups" isn't entirely new. For example, in 2011 the dutch company The Startup Stock Exchange promoted much of what SET hopes to accomplished. However, critics will point out that the Startup Stock Exchange has essentially followed the path of becoming another Kickstarter. So is it even possible to create a stock exchange meant for start ups? We need to keep in mind that the SET has not released a proposal yet.
A big problem that will emerge is that the new bourse will be populated with numerous start ups. Going public on day one will undoubtedly be appealing to numerous start ups. While some will be great, a vast majority of them will be unreliable and poorer quality, and they will be the ones who will feel compelled to join. It is unknown whether the SET will impose strict regulations on which startups can list and which cannot. As the original two tier exchanges are imposing stricter regulations on a regular basis, it is not unreasonable to think that the new exchange will be open to practically anyone. This will lead to very few people actually having interest in investing in the listed start ups.
While yes, investors can make up to two to three times the money they invest, they also risk losing all of it. Most startups that list with the new exchange will likely be deemed by investors as lower quality. As a result, Investors actions would probably not change significantly, and would still go to incubation groups, or startups already gaining momentum when looking to invest. However time will tell how this new exchange will do. Should the SET make more strict regulations for the sake of investor safety, the proposal could have great potential.