IPO Initial Public Offerings

Information on Going Public

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Pros and Cons of an IPO

The pros and cons of going public or an Initial Public Offering. The process is an expensive consideration, and even more so for small cash-strapped young companies. When a company is contemplating the IPO process of going public to become a public traded company, it must consider the advantage and disadvantage of going public or an IPO. You will want to have a group with IPO resources and IPO services involved in making that decision. It is important to have a good IPO guide and to accept and to follow the advice of IPO advisors.

The Going Public process, what is it and is it right for your business?

Once a private company becomes publicly traded, it will register securities with the SEC so that it can make an offer and sell those stocks. This is the biggest difference in operational status of a private vs. public company: The public company can offer its stock to the public, whereas the closely held private company is restricted to private venues, such as: friends, family members, and very close business associates.

The above paragraph contains very important considerations, since most companies that go public are interested in raising capital. Furthermore, investment bankers and FINRA member broker-dealers and market makers prefer to deal with a public company when underwriting an investment. A well ran private company with a healthy bottom line, quarter after quarter, is an excellent candidate to go public and attract outside investment capital.

Once your company goes public and you have satisfied all regulatory requirements may be able to sell stock directly to investors. The lack of funding alternatives inherent to private companies will hopefully become a thing of the past! No longer will your funding initiatives be restricted to only private venues. The unsavory terms offered private companies from Angel Investors and Venture Capitalist will become a distant memory.

Once you go public and file a registration statement with the SEC (Securities and Exchange Commission), and follow other guidelines, you can even advertise that you're a public company and perhaps contract for the services of an IPO underwriter to sell your stock.

This allows you to go public without having to depend entirely on outside parties to connect you to capital sources. It is important to note that you can become a public company without raising any money and without investment bankers. We can introduce you to sources of capital including our network of Investment Banking Firms and other financing groups. Our direct IPO advisory services will allow your company to be able to compete with the big firms when trying to raise capital

IPO News: The Main Advantages of an Initial Public Offering (IPO)

The increased capitalization for the issuing business is a strong point to consider, since a public offering creates a market value on a company’s stock. Company directors and shareholder can retain their stock and use it for varied activities, such as: currency for mergers and acquisitions, as stock options to help retain key personnel, they may also sell their shares in the open market.

Additionally, the business will have greater access to the capital markets for future capital inflow, guided by IPO advisors. In general terms, a company’s valuation should improve after going public, making it possible for the company to receive much better terms from lenders.

Undertaking IPO services and offering securities to the investment public will help a company’s management and directors retain a large degree of control. For example, if a private company decides to use the services of venture capitalists to raise capital, instead of going public, the VC’s (Venture Capitalists) might insist on a decision-making position, such as a seat on the board of directors. When a company decides to raise capital via the going public process, those unpleasant considerations are avoided with the help of an IPO adviser.

No doubt the prestige related with becoming a public company has a definite appeal. The fact that it’s easier to promote a public company is also a pertinent consideration. Public companies have historically achieved higher recognition than private companies; hence, the public relations image and the perceived stability of being a public company is good news and a plus.

Are there Disadvantages to Going Public?

Some of the typical expenses associated with taking a company public include fees for legal and accounting services. Of course the SEC (Securities and Exchange Commission) quarterly and yearly reporting requirements are a burden for small companies.

Is There an Easier, Better Way to Go Public?

The easiest way for most companies to go public is to get listed on the Pink Sheets OTC Markets or the Over the Counter Bulletin Board OTCBB. Going public via the Pink Sheets is an excellent first step for smaller companies to become publicly traded entities. Here are some further advantages offered by our IPO adviser:

• There are no reporting requirements

• There is no business longevity requirement

• No Revenue or earnings requirement

• No minimum asset requirement

As IPO advisors we always suggest that even smaller companies consider the possibility of going public. Remember even a start up company can go public.

For a more in depth study of how to do an IPO, and to learn how to take a company public, please visit www.tcc5.com

The price to go public is usually $100,000 and the services are offered by the president of Tiber Creek, a going public services attorney in business since 1975.

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