Sharing our experience of taking a startup 'Public', via a pivot...

bidstack is now a PLC - and I'd like to share some of the experiences of the Reverse Takeover we went through.

This time last year bidstack was a private company, raising money month on month to survive and we had just completed our pivot into the gaming space (away from the world of Digital Out of Home), launching our ad tech into the world famous Football Manager game.

bidstack was setup in 2015 initially to open up the buy-side of the Digital Out of Home (DOOH) market - aggregating remnant digital billboard assets into one centralised platform, to empower anyone to buy billboard space for hourly/daily use - a mix of eBay meets AirBnb.

Our aggressive marketing which included a punchy Crowdcube video and a sponsorship of EFL Championship football club Norwich City Football Club gave us enough brand visibility to give the company a number of alternative routes outside of the real world of billboards - one being the billboard space that sits within video game environments.

A lengthy negotiation with Sports Interactive and SEGA Europe concluded with bidstack securing a multi-year exclusivity on ownership of the perimeter billboard space that sits within their Football Manager title. We pivoted fully into the gaming world upon launch of Football Manager 2018, in November last year.

In short, our adtech enables brands to target specific advertising messages on a per gamer basis, based on demographic / location etc.

bidstack.com initially had a self-serve platform, but it became immediately clear that the scale was in the world of programmatic and empowering agencies to buy our real estate via their advertising trading software.

In Q1 of this year we started exploring funding options, to build out a new development and commercial team.

We were fortunate to have a number of inbound enquiries from Venture Capital and Family Office funds. Mainly due to bidstack appearing in their research for other investment opportunities within the worlds of VR, gaming and esports.

We were also introduced to a M&A lawyer, who opened up an additional funding route - a Reverse Takeover. In essence the business would be acquired by a cash shell and back itself into a Public Company listing. The Limited company would be acquired in its entirety and the PLC, which would be renamed to reflect our business, would go forward as 'bidstack'.

The upsides to a transaction like this, when reviewing options, include:

• There is a exit opportunity for the Ltd company investors
• Access to funding post-float can be easier
• With strong news flow the businesses worth inflates
• As we are effectively selling 'net new' media, having 'PLC' after our name brings a certain gravitas - and has accelerated deal-flow.
• Access to a Convertible Loan Note (CLN)

We met with representatives of KIN Group PLC - a clean cash shell, formerly Fitbug/KIN Wellness (a Fitbit rival) - in April, at our lawyers offices. It became clear there was interest from both sides to explore how a deal could work.

The initial meeting was very much a presentation from bidstack, followed by a pitch from the representatives / brokers of the shell, explaining the benefits.

For a company in our position, that forward lending of cash via a CLN would enable me and our CTO (the brilliant Francesco Petruzzelli) to stop with the monthly investor pitches and focus on scaling the business, amid the potential due diligence.

With a heavy heart we walked away from talks with a Family Office and signed an exclusivity period with KIN. This was after valuation (￡6.8m for bidstack Ltd - a 5x+ return for our Crowdcube investors), a premium for legacy KIN shareholders and our funding target (￡3.5m clean) were agreed.

The following weeks we conducted top level due diligence with the KIN Lawyer and Accountant, which when concluded successfully, we received a ￡400k convertible loan note - in early June.

Between June and the end of August, KIN Group PLC had a target deadline to avoid the delisting of their shell from AIM. This gave everyone a hard focus on getting the listing concluded.

The extended due diligence was a thorough exam - all contracts / transactions / agreements / processes were examined in vast detail over a two month process. Whilst the DD was going on, myself and Francesco were liaising with our broker on how to approach the market, who to see, booking meetings, preparing presentation and investor documentation, for a number of pitches in July/August.

Our target of ￡3.5m was luckily oversubscribed, so we had the opportunity to take some secondary stock (give an exit to some shareholders in part or full) - which was immensely satisfying.

Unlike Ltd company life, as a PLC there are research notes / trading updates shared with the open market. If you are aware you'll miss market expectations by 10% or more, a profit warning must be circulated to the market - and, in our case, having a ￡300k+ revenue target for 2018, from an almost pre-revenue starting point on placing, sharpens your focus and decision making.

It's been brilliant to see adverts for the likes of MG / Audi within the gaming environments. Targeted campaigns have run in the UK, Spain and Asia, among others.

Since floating on AIM it was initially remarkably tempting to keep checking the share price - to the point of it being counter productive. Some in the office had our share price on their iWatches - not helpful.

We're now three months in, and I've been lucky to get a whole plethora of advice. We are very happy with where we are and what's coming - it is a different stress scaling the business, rather than keeping the lights on. We are now over two offices, one in London on the Olympic Park - with the other, in Riga - and possibly more to come. Our pool of talented staff on our books is very exciting and energising for me personally.

Adding Codemasters' to our list of Publishers, is a personal highlight, given my love of their motorsport titles. Securing DiRT Rally 2.0 and another Codemasters franchise, to multi-year deals is a privilege. Serving advertising trackside within console environments is also an exciting challenge.

Our communication with the market will be clear and consistent through 2019, as we've had to get our head down in this last quarter - and the downside to being public is the sensitivity around the information you can share. We'd love to talk about what we have coming - but, sadly we can't until it's all signed. The hype machine is definitely different in this world.

Reality is our share price / market cap isn't always where it would be in a Ltd company world, but this ebbs and flows. It's a fascinating journey.

There are always Cash Shells on AIM - not many, but a few, and as an alternative to the Venture Capital / Family Office route, I'd say its a route well worth exploring. Happy to advise / share knowledge with fellow founders on this.