Going public, the better alternative to a reverse merger with a public shell

“Going Public” is the procedure of selling shares that were once held by a private company to the general investing public for the very first time; at other times it has also been called an IPO (Initial Public Offering).

Many experienced businessmen have the grand dream of taking their private company public. The financial incentives and rewards of becoming a publicly traded company include opportunities not available to private companies. Of course, the prestige and glamour are milestones of success when a formerly private company goes public. However, the many going public vehicles and the new financial responsibilities associated with a public company can make it a daunting proposition. The going public process is a multifaceted procedure involving many skills and business disciplines; it can also be mystifying and perplexing even for the professionally trained.

When private companies choose to go public, the usual reason is to raise capital.
A basic understanding of the many ways private companies can go public and what securities laws are relevant is in order, and the need to weigh options clearly, is a must. These are some of the benefits of taking a company public:

• The available sources of capital will multiply because you can now approach many more prospective investors.
• Investors – as well as company directors – have an exit strategy to sell their shares and recoup their investment capital.
• Raising capital is easier, and if investment attention about your company grows, it could uphold a secondary trading market in your stock.
• By offering stock options your company can attract and retain qualified personnel.