Small Business to Public Company

I've noticed that we are starting to see some I.P.O.'s happening: Zynga, Groupon, etc. What's an IPO? Initial Public Offering, when a company goes public for the first time. So you started your company a few years ago and it is doing well, and you want to grow larger. You have been looking for financing from banks and lenders and you cannot get enough money. This is when you start thinking about going public. Start talking to investment banking firms and along with your CPA.  They will come up with the true evaluation of your company. Once that is determined, you decide how many shares you want to put out on the market. Most companies only release a small percentage of available stock to remain in control. You want to keep more than 50%.  Remember, you are selling your company to stock holders and getting money for shares in you company. This is a way to get the funds you need without borrowing, but, you are giving  up some of your company. If you have a really good company, this is the way to cash out for all your hard work. Be sure before you do it!  I have seen company owners buy back all  the stock because they don't like the overview of stockholders or the SEC, and public companies have  a lot more regulations!


What do you think?
Your Business Guru,


John