AIM admission: running due diligence and the data room with your Nomad

Who does what in an AIM due diligence process?

A float on AIM is not one diligence exercise but five or six running in parallel, each with its own output and its own deadline. The table below is the shape most UK flotations follow. Firms vary, and some roles are combined, but the deliverables are fairly consistent.

The point of the table is practical. When an adviser asks “can I see everything?”, the honest answer is usually no, and the reason is that each workstream has a defined job. Building the room around those jobs saves weeks of rework later.

What do the AIM Rules actually require from the company and the Nomad?

Two rulebooks frame the process. The AIM Rules for Companies set out what an applicant must disclose and when, including the content of the admission document and the timing of the pre-admission announcement. The AIM Rules for Nominated Advisers set out what the Nomad must satisfy itself of before it signs its declaration. Both are published by the London Stock Exchange on its AIM pages, and they are worth reading in the original rather than in summary.

For data room purposes, three requirements matter most.

First, the Nomad must be able to show that it has carried out sufficient due diligence. In practice that means it relies on the reports produced by the reporting accountants and lawyers, and it needs to see what those reports were based on. A Nomad that cannot trace a conclusion back to a document is exposed if the Exchange later reviews its work.

Second, the admission document must include a working capital statement: the directors confirm, after due and careful enquiry, that the group has enough working capital for at least 12 months from admission. The reporting accountants test the forecast behind that statement. Every version of that forecast should sit in the room, dated, so the final approved model is unambiguous.

Third, the company must notify the Exchange of key information before admission through the Schedule One announcement. The rules set that at least 10 business days before the expected admission date, or 20 business days for a quoted applicant moving across from a designated market. Much of the content (name, business description, directors, substantial shareholders, expected admission date) comes straight from documents you have already uploaded.

Why should each adviser have its own permission group?

On a private sale the instinct is to create a “buyer” group and a “seller” group. On an AIM float that is too coarse. The adviser team typically includes:

• the Nomad and its corporate finance team;
• the broker, which may be the same firm as the Nomad or a separate one;
• the reporting accountants;
• the company’s solicitors;
• the Nomad’s (and broker’s) solicitors;
• sometimes specialist advisers, such as patent attorneys for a technology company or a mining expert for a resources company.

Each of these firms has a different need. The reporting accountants need the finance folders in depth and do not usually need employee contracts in full. The broker needs enough to write the research and plan the placing, but early access to unpublished forecasts is a sensitive matter and is normally handled carefully, often with a research cut-off and specific procedures. The Nomad’s lawyers need to review the legal due diligence report and its sources, but do not need to edit anything.

Giving each firm its own group also makes the audit trail readable. When the Nomad asks, two days before the document goes to print, whether the reporting accountants ever opened the revised customer contract, a per-firm log answers that in seconds.

The matrix above is a starting point, not a rule. Some Nomads want full access to everything and will say so; some companies keep HR files anonymised until late. Agree the matrix at the kick-off meeting and record it in the room itself.

When does the data room become a source of inside information?

Earlier than most founders expect. Once a company has requested admission of its shares to AIM, it is in scope of the UK Market Abuse Regulation, and from the point a float becomes a real prospect, the fact of the float and the financial information behind it are highly price sensitive for anyone dealing with the company’s existing investors or counterparties.

The FCA’s market abuse pages set out the regime, including the requirement for issuers and those acting on their behalf to keep insider lists. Many advisers now start a project insider list at the kick-off meeting rather than waiting for the formal trigger, because reconstructing who knew what, months later, is unpleasant.

A data room helps in three concrete ways:

• every person given access is named, with an email address and a firm, which maps directly onto an insider list;
• access is time-stamped, so the date a person first saw the forecast is on record;
• removing access is immediate, which matters if a project is paused or an adviser is replaced.

The room’s user list and its access log are, in effect, a draft insider list. Treat every invitation as an addition to that list, and agree with the Nomad who signs off new users.

None of this replaces the formal list or legal advice on when the regulation applies. It just stops the room from being the weak link.

What goes into the room, folder by folder?

A float room looks like a sale room with three extra layers: the regulatory documents, the working capital model, and the verification evidence. A workable top level for a UK company is:

The verification folder deserves a word of its own. Verification notes are a long question-and-answer document: for each material statement in the admission document, someone asks “what supports this?” and the answer points to evidence. If the evidence lives in the room with a stable number, the note can cite “see 9.4.2” and anyone can check it. If the evidence lives in someone’s inbox, the note is weaker and the directors, who take responsibility for the admission document, are more exposed.

How do lock-ins and director arrangements show up in the room?

AIM has a specific lock-in rule. Under Rule 7 of the AIM Rules for Companies, where an applicant’s main activity has not been independent and earning revenue for at least two years, related parties and applicable employees must agree not to dispose of their interests for one year from admission. Many companies that are not caught by the rule still agree voluntary lock-ins with their Nomad and broker as part of the placing.

Either way, the lock-in agreements, director service agreements, letters of appointment for non-executives and any relationship agreement with a significant shareholder are drafted during the process and should be stored in the room as they progress. Keep drafts in a “working” subfolder and move signed versions to the final folder, so nobody mistakes a draft for the executed document. Readers who want the precise wording of Rule 7 and its exceptions should go to the rulebook itself rather than rely on any summary, including this one.

How should you handle Q&A between advisers?

Diligence questions on a float run in several directions: Nomad to company, reporting accountants to finance director, Nomad’s lawyers to company’s lawyers. Email chains fork quickly. A data room with a structured Q&A function keeps each question tied to the person who asked it, the person answering it and the documents cited.

Three habits help:

1. Number questions by workstream (FDD-001, LDD-001) so they can be referenced in reports.
2. Route answers through a single coordinator at the company, usually the finance director or company secretary, so nothing goes out unchecked.
3. Close questions formally, with the final answer and any supporting upload, rather than letting them trail off.

When the long-form report or legal due diligence report says “management has confirmed”, the room should show exactly when and how.

What does a sensible preparation checklist look like?

Six to ten weeks before the kick-off meeting, the company can do a lot of the groundwork itself. This list is deliberately practical.

• Reconcile the statutory registers with Companies House filings and fix any gaps.
• Gather three years of audited accounts and the latest management accounts in one place.
• Prepare a first draft of the working capital forecast with assumptions written out.
• Collect signed copies of all material contracts and flag change of control clauses.
• Confirm that founders, employees and contractors have assigned IP to the company in writing.
• Anonymise staff lists and set aside special category data under UK GDPR.
• Draft a folder index that mirrors the structure the Nomad and lawyers will use.
• Decide who at the company approves new users and keeps the project insider list.
• Agree, in writing, which adviser firms see which folders.
• Choose a data room with per-group permissions, Q&A and a full audit trail.

On the data protection point, the ICO’s guidance on UK GDPR applies to diligence like any other processing. Advisers rarely need named employee data until late, if at all.

Which data room features matter most for an AIM float?

Feature lists look alike. For a float, the ones that actually get used are narrower than vendors suggest.

Most established providers on our UK ranking cover the top five rows. Where they differ is ease of use for outside parties, how quickly the room can be built, and how pricing works across a process that can run from three to six months. Our methodology explains how we weigh those factors.

How long does it take, and when should the room open?

A typical AIM timetable runs about three to four months from appointing the Nomad to admission, longer if the business needs restructuring first. The room should open before the kick-off meeting, with at least the corporate and financial folders populated, because the first week of adviser work is spent reading.

A rough sequence:

After admission, export the room and keep the archive. Questions about what was disclosed and relied on can arise years later, and the company’s continuing obligations as an AIM company start straight away.