White Collar | Failure should be an option, even an expectation for those who enter into start-ups
Hong Kong Exchanges and Clearing should have a contingency plan in place to help young entrepreneurs recover in the event of business failure
While the stock exchange has proposed a new market geared towards start-ups, it appears young entrepreneurs no longer need to worry about funding sources to support their business. However, they now need to think more about what they do when they fail.
Many studies show the failure rate among tech start-ups is as high as 70 per cent.
For this reason, Hong Kong Exchanges and Clearing last month proposed a new board that will include two markets. The first is geared towards younger start-ups, considered high risk ventures which would be suitable only for professional investors. The second market is for bigger technology companies, with dual class share structures, which meet all the profit requirements of the main board. This premium market would be open to all investors.
The proposal, up for market consultation until August, may result in the launch of the third board as early as next year.
This would be good news for Hong Kong’s start-up community, which saw a 24 per cent jump in the number of young companies last year, according to government figures.
InvestHK said the number of start-ups rose from 1,558 in 2015 to 1,926 in 2016, with local ownership increasing from 50 per cent to 62 per cent.
