FOR many entrepreneurs, the term "stock exchange" conjures images of billion-dollar corporations, complex regulations and public listings.
As a result, many assume capital markets are only for large companies.
The Zimbabwe Entrepreneurship Exchange (ZEEX) is attempting to change that perception.
One of its most significant innovations is Private Markets, a platform that allows businesses to raise capital from investors without becoming publicly listed.
For thousands of Zimbabwean SMEs, that could prove to be the missing link between relying on bank loans and eventually becoming a listed company.
Unlike a traditional stock exchange listing, where shares are offered to the public, Private Markets connects entrepreneurs with a smaller group of institutional investors, pension funds, high-net-worth individuals, family offices and development finance institutions interested in backing promising businesses.
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The company remains privately owned.
Instead, businesses gain access to growth capital through a regulated marketplace rather than relying solely on debt.
Zimbabwe Stock Exchange Holdings chief executive officer Justin Bgoni says this flexibility is one of ZEEX's biggest advantages.
“There are three levels through which SMEs can participate in this market. The first one is what we call Private Markets. You can come and raise money and not get listed. So, you don’t have to come and get listed. You can come and raise money.”
That distinction is important.
Many businesses are not yet ready for the reporting obligations and public scrutiny that come with a stock exchange listing.
They may still be family-owned businesses, expanding manufacturers or fast-growing service providers that require capital but prefer to keep ownership within a relatively small group of investors.
Private Markets provides that opportunity.
Consider a food-processing company generating annual sales of US$2 million.
Demand is growing rapidly, but management needs US$500 000 to purchase a second production line.
A bank may ask for property as collateral and charge interest.
Through Private Markets, the company can instead present its business plan, financial performance and growth strategy to investors willing to finance the expansion in exchange for an agreed investment structure.
The capital raised can be used to increase production, enter export markets or develop new products without the business first having to become publicly listed.
The process differs fundamentally from borrowing.
Rather than assessing only collateral, investors examine the quality of the business itself.
They want to understand management, governance, financial records, market opportunity and future earnings.
In other words, they invest because they believe the business can create value over time.
That philosophy aligns with a broader shift in SME financing.
For decades, entrepreneurs have asked one question:
“Which bank will lend to me?”
Private Markets encourages a different question:
“Why should someone invest in my business?”
To improve the quality of businesses entering the market, ZEEX requires every entrepreneur to work with an accredited Sponsor.
Sponsors are licensed advisory firms that help entrepreneurs prepare investment-ready proposals, choose suitable financing instruments and present opportunities in a way investors understand.
As Bgoni explained: “When you come onto the platform, you need a sponsor.”
He added: “They help you develop your idea.”
Once prepared, the investment proposal is submitted to ZEEX.
Approved proposals are published in the ZEEX Deal Room, where investors review them independently.
The exchange itself does not choose who receives funding.
The decision rests entirely with investors.
“You don’t have to convince us as the exchange. You have to convince people. There are people out there who will be willing to listen to you who have money. You convince them.”
The model is designed to solve another challenge facing Zimbabwe’s SMEs.
Many businesses are too large for micro-finance but too small — or simply not ready — for a stock exchange listing.
Private Markets creates a financing stage between those two extremes, giving entrepreneurs access to institutional capital while allowing them to remain private.
For investors, the attraction is equally clear.
Rather than waiting for businesses to mature before investing, they gain access to companies earlier in their growth cycle, when expansion opportunities — and potential returns — may be greatest.
This captures the purpose of Private Markets.
It is not designed to replace a public listing.
It is designed to prepare businesses for one.
Some companies may remain private for years.
Others may eventually graduate to ZEEX’s Public Markets before progressing to the Zimbabwe Stock Exchange or Victoria Falls Stock Exchange.
For entrepreneurs, the message is simple: You do not have to be listed to access capital.
Sometimes, the first step towards becoming a public company is raising private capital from investors who believe in where your business is headed — not just where it is today.