Development Capital Exchange
In March 1998 a new "stockmarket" was launched on the web, the Development Capital Exchange ( DCX ).
It is specifically designed by the Private Equity Funding Association for informal investment in unlisted Small and Medium-size Enterprises (SMEs). These are companies looking for anything between £10,000 and £2 million in funds which do not meet bank lending or venture capital criteria.
Potential investors surfing onto DCX are warned that the onus of "due diligence" rests entirely with them. The key difference between investing in quoted stock and participating as an investor/director in an unquoted company, is that the business plan is only a basis for negotiation. It is not an investment document and there are no protections for the investor should things go wrong.
Investors subscribing to DCX remain anonymous until they decide to open negotiations with a company in which they are interested in investing. You need only reveal your identity to the DCX member firm handling a particular opportunity when you are ready to open negotiations. However, the company or individual seeking funds is obviously within their rights to ask you to identify yourself before releasing a full business plan.
A detailed listing page contains the past three years audited accounts, where these are available, together with three year forecasts of turnover and profits. There is also a 200 word summary of the opportunity . This does not contain the name of the company or entrepreneur seeking funds but will direct the potential investor to a DCX member firm advising the business. This means the firm seeking funds is not put in the position of making a public offer of shares without a prospectus.
If, after reading the detail of an individual opportunity, you want to see a copy of a business plan, you can click an icon on the case listing page which will give you the DCX member's details and make contact automatically through e-mail.