What to do If Your Company Wants to go Public?
“The best method that is available for going public these days is the IPO (Initial Public Offer). ”
Going public is considered a good option by many a company because these days companies are much in need of capital. The best method that is available these days is the IPO (Initial Public Offer).It is considered to be a very difficult method but is capable of raising a lot of capital for our company. In fact, the capital is infused into your company in such a quantity that no other method comes close by for the accomplishment of such an endeavor.
You get a high initial stock value and the support of the venture capitalists who are always ready to help you with their expert personnel. Your shareholders especially the non-affiliate ones are very happy as they get a high value for their money.
However, a major demerit is that you don’t have full control over your company. The venture capitalists who come to your aid have a lot of say in the company. Agreed that they have contributed a lot to your company by way of a huge stock but they try to compensate for it fully.
They try to favor those people with whom they had good business relations in the past. They also pressurize you to take the help of their accountants, lawyers and advisers. But such things are tolerable compared to the benefit of this method of raising excellent public capital.
Another reliable method is the ‘reverse merger’ into a public casing. By the use of this method you are able to achieve your objectives in a very short span of time, say in 2 to 4 months. In such a system, the persons who are already in the public casing into which you want to merge have the dominant say.
All the more, the advisers and other personnel are more loyal to such casing providers that your company. This method is also costlier than the IPO method. Corporations, which provide a public footing to new companies by way of this method, are the real players.
You cannot be always sure about their credibility, as the market is fraught with such corporations and persons who conduct business under several names and hence are able to hide their true identity in case of a fraud.
Author - DeeKay
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