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Take Your Company Public

Assisting private companies in trading and navigating in the public markets.

We are an investment bank, assisting private companies in their desire to list and trade on public exchanges (e.g. NYSE, NASDAQ & OTC). We are a recognized leader initial, direct and alternative public offerings.

We provide going public business expertise an unparalleled results for our clients in North America, Europe and Asia. We are dedicated to serving our client’s public markets needs and achieving their goals. We hold the experience, knowledge, staff and resources to ensure successful, practical and cost-effective going public solutions.

A successful corporate securities and offering transaction requires a team of professionals with the right combination of legal knowledge, securities acumen and capital raise creativity. Our focus and team oriented approach ensures that we execute for our clients each and every time.

There are many strategies for taking a company public. Most are expensive and/or time consuming. Three popular methods are the IPO (Initial Public Offering), APO (Alternative Public Offering) and DPO (Direct Public Offering).

Going Public: Step-by-Step

  1. Planning–Developing a unique business concept. Writing an Executive Summary.
  2. Founding–Using a Pre-Incorporation Agreement to put founders in place. Incorporating the business.
  3. Documenting–Writing an offering Document, as well as FORM D(s), state documents, and other corporate records.
  4. Capitalizing–Using the offering to raise initial capital.
  5. Registering–Writing and filing FORM 10, S-1, or other registration documents in order to register shares and trade publicly .
  6. Filing–Writing 15c211, due diligence materials. Securing a filing Broker or Market Maker for NASD submission.
  7. Promoting–Announcing the public status. Developing Investor and Public Relations programs.

Below we provide some details about the process and reasons for taking a private company public.

For more information, please get in touch with one of our bankers.

Initial Public Offering

Taking your company public by IPO will require a large investment bank to underwrite your offering. The investment bank is basically purchasing your private shares today with plans to sell them at a profit to the public. Although you may receive funding sooner than later, the entire process is expensive and very few companies meet the stringent criteria.

Direct Public Offering

A DPO or “registered offering” allows a company to sell shares directly to the public. Although much less expensive than an IPO, the company will not receive funding until after the company begins trading and the public purchases the stock.

Alternative Public Offering

This method of going public provides immediate funding because its very attractive to investors who purchase shares in a private placement (PPM), which are later registered and sold to the public at a profit once the company begins trading. This method is typically done through a reverse merger with a public shell.

Why Go Public?

Access to Capital

A publicly traded company has greater financing alternatives than a private company. A publicly traded company can return to the public markets for additional capital via a bond or convertible bond issue or secondary equity offering. A public status can also provide favorable terms for alternative financing from public and private investors. Additionally, public lenders and suppliers may perceive the company as a safer credit risk, thereby increasing the opportunities for favorable financing terms. Also, a publicly traded company’s stock can be utilized to be used as collateral to secure loans.

Valuation

In general, public companies have a higher valuation than private enterprises. This fact has been proven by many studies to be up to the multiple of five times. In a report in Entrepreneur Magazine, a study was cited that showcased some of the reasons for higher public company valuation. They included market liquidity, profit measurement, capitalization & capital structure, risk profile and differences in operations. This is very important in an exit scenario whereby your company may eventually be acquired by another company.

Liquidity

A publicly traded company has created a market for its stock in which buyers and sellers participate. As such, stock in a public company is much more liquid than private company stock. Being publicly traded may provide a ready outlet for investors, institutions, founders, owners and venture capital funds.

Compensation

It is increasingly common to recruit and compensate executives and employees with a combination of salary and stock. Stock based compensation can be instrumental in attracting and keeping key personnel. An allocation of ownership or division of equity can lead to increased productivity, morale and loyalty. This type of compensation is a way of connecting an employee’s financial future to the company’s success.

Such stock compensation to employees is more desirable if the stock has a public market. Also, certain tax advantages are a consideration when issuing stock to an employee. Generally, capital gains taxes are lower than ordinary income taxes.

Stock in a public company can be issued as a performance based reward or incentive. As such, the public company may be able to lower its operating overhead by compensating employees with cash and a stock option plan.

Prestige

Being publicly traded can help a company gain prestige by creating a perception of stability. A company’s founders, co-founders and managers gain an enormous amount of personal prestige from being associated with a client that goes public. Prestige can be very helpful in recruiting key employees and marketing products and services. This exposure may lead to improved recognition and business operations. Often a company’s suppliers and consumers become shareholders, which may encourage continued or increased business. In this example, a public company could have a large competitive advantage over its private competitors.

Publicity

A publicly traded company may generate prestige, publicity and visibility, which is effective when marketing your company and its products or services. Public companies are more likely to receive the attention of major newspapers, magazines and periodicals than a private enterprise. A successful public listing can get a company’s story out to the world, which may open an opportunity for investors that are not suited for an investment in a private company. Additionally, being publicly traded makes it easier for other companies to notice and evaluate the firm for potential acquisition.

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A publicly traded company tends to have a higher profile than private firms. This may be important in industries where success requires customers and suppliers to make long-term commitments. Indeed, the suppliers’ and customers’ perception of company success is often a self-fulfilling prophecy.

Mergers & Acquisitions

Once a company is public and the market for its stock is established, the company’s stock can be looked at as “currency”. It is sometimes looked at more favorably than cash due to long-term tax implications when acquiring a business. This fact, along with the higher valuation of a public company, can make a key acquisition less expensive than for its private counterparts.

Exit Strategy

One of the important benefits of being a publicly traded company is the fact that when the company’s stock eventually becomes liquid, it may provide an effective exit strategy and financial freedom for its founders and employees. A public market for the stock may also provide a potential exit strategy and liquidity to the investors. Owning a publicly traded stock may enhance the personal net worth of a company’s shareholders.