I agree that IPOs are one of the most expensive ways to finance a business the fees and expenses of 'going public' can reach six to seven figures, this is not an easy way.

Interesting post.  I would say that, under current conditions, it wouldbe better for a company considering going public to resist thetemptation.  Increasing government infuence in the market should make any CEO warry.  As an American living and working in Medellin Colombia I can say that it is a joy to do businees in a country with lessrestrictions/taxes on small businesses.   Medellin Colombia JamieD wrote: Are you thinking of taking your business public?  'Going public' can be a very complex process and shouldn't be rushed into.  Many businesses consider going public as a means to raise additional capital.  While this is possible, it's much more complicated than that.  Before you decide to attempt the transition, check out this quick guide to understand the who, what, where, when, and why of going public.   Who Many businesses, from start-ups to established companies, may consider becoming a public company.  The most important thing to consider when deciding if going public is an option for your business, is knowing that you can demonstrate significant future growth potential. If you can prove that your business is not only profitable now, but will annually increase sales and earnings, then you have a chance at becoming a successful public company.   What When a business decides to 'go public', it's done through an initial public offering (IPO).  An IPO takes place when a company's equity is sold  through an investment banking firm.  That equity is formed into shares of common stock that are intended to be traded on a legitimate stock market.   Where Initial public offerings are conducted by investment banking firms.  To find the right investment banker for your business, you'll have to do your due diligence.  Find a firm that has done IPOs that are comparable in size and scope to that of your business.  Several important industry resources include: U.S Security and Exchange Commission's New Registration Report* IPO Central* Many small businesses that become public companies end up on the Nasdaq SmallCap Market or the Nasdaq National Market System   When It's difficult to label the 'right' time to go public because companies can make the leap in different stages.  A good rule of thumb may be to compare your business data and statistics with those of successful public companies.  Many successful public companies have at least an annual growth potential of 20%.  By comparing your self to other businesses that have gone public, you'll have a better understanding if your business is ready or not.  For more information on the possibility of becoming a public company, or any other issues that arise with IPO's, contact the U.S. Security and Exchange Commission's Small Business Ombudsman.   Why Businesses chose to become public entities for many reasons.  It's important to weigh the 'pros' and 'cons' before making such a decision.   Important benefits... Your access to capital will increase - many companies 'go public' to raise additional funding that doesn't need to be paid back Your business will have direct access to capital markets and can raise additional funds by issuing additional stock in a secondary offering You'll generally have an easier time raising private funds Your business will become more recognizable and gain credibility Business can often attract more highly qualified employees by offering stock options, bonuses, and other incentives with a known market value Public companies are worth more than private companies Important concerns... IPOs are one of the most expensive ways to finance a business - the fees and expenses of 'going public' can reach six to seven figures An IPO is extremely time consuming Many businesses fail trying to becoming IPOs - typically less than 1,000 businesses a year are successful You must keep all shareholders informed on business operations, financial and management conditions, and new legal obligations - Your business could be liable for failure to fulfill those obligations You will most likely lose some management flexibility in your business affairs   Additional Resources Securities Laws, Financial Reporting, and Investor Resources SBA Guide on Selling to the Public - Initial and Direct Public Offerings SEC Statues, Rules, and Forms   Note: * Hyperlink directs reader to a non-government Web site. Message Edited by JamieD on 10-19-2009 01:40 PM Message Edited by NicoleD on 10-19-2009 02:06 PM    

Interesting post.  I would say that, under current conditions, it would be better for a company considering going public to resist the temptation.  Increasing government infuence in the market should make any CEO warry.  As an American living and working in <a href='http://www.colombiamedellin.org'>Medellin Colombia</a> I can say that it is a joy to do businees in a country with less restrictions/taxes on small businesses.

Another structuring factor is that it is always superior to do filings from scratch when going public rather than the typical reverse mergers with shell corporations. A company can be structured from scratch correctly with out a lot of constraints from pre-existing structure. ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.

If the transaction is structured correctly, going public is ALWAYS the superior choice over not going public. The leverage and advanteges will always outweigh not going public provided the transaction is structured properly. The only reason people do not get the full benefit of going public is because of poor structuring from their consulting investment bankers and attorneys etc.

Interesting post.  I would say that, under current conditions, it would be better for a company considering going public to resist the temptation.  Increasing government infuence in the market should make any CEO warry.  As an American living and working in <a href='http://www.colombiamedellin.org'>Medellin Colombia</a> I can say that it is a joy to do businees in a country with less restrictions/taxes on small businesses.

Interesting post.  I would say that, under current conditions, it wouldbe better for a company considering going public to resist thetemptation.  Increasing government infuence in the market should make any CEO warry.  As an American living and working in Medellin Colombia I can say that it is a joy to do businees in a country with lessrestrictions/taxes on small businesses.   Medellin Colombia JamieD wrote: Are you thinking of taking your business public?  'Going public' can be a very complex process and shouldn't be rushed into.  Many businesses consider going public as a means to raise additional capital.  While this is possible, it's much more complicated than that.  Before you decide to attempt the transition, check out this quick guide to understand the who, what, where, when, and why of going public.   Who Many businesses, from start-ups to established companies, may consider becoming a public company.  The most important thing to consider when deciding if going public is an option for your business, is knowing that you can demonstrate significant future growth potential. If you can prove that your business is not only profitable now, but will annually increase sales and earnings, then you have a chance at becoming a successful public company.   What When a business decides to 'go public', it's done through an initial public offering (IPO).  An IPO takes place when a company's equity is sold  through an investment banking firm.  That equity is formed into shares of common stock that are intended to be traded on a legitimate stock market.   Where Initial public offerings are conducted by investment banking firms.  To find the right investment banker for your business, you'll have to do your due diligence.  Find a firm that has done IPOs that are comparable in size and scope to that of your business.  Several important industry resources include: U.S Security and Exchange Commission's New Registration Report* IPO Central* Many small businesses that become public companies end up on the Nasdaq SmallCap Market or the Nasdaq National Market System   When It's difficult to label the 'right' time to go public because companies can make the leap in different stages.  A good rule of thumb may be to compare your business data and statistics with those of successful public companies.  Many successful public companies have at least an annual growth potential of 20%.  By comparing your self to other businesses that have gone public, you'll have a better understanding if your business is ready or not.  For more information on the possibility of becoming a public company, or any other issues that arise with IPO's, contact the U.S. Security and Exchange Commission's Small Business Ombudsman.   Why Businesses chose to become public entities for many reasons.  It's important to weigh the 'pros' and 'cons' before making such a decision.   Important benefits... Your access to capital will increase - many companies 'go public' to raise additional funding that doesn't need to be paid back Your business will have direct access to capital markets and can raise additional funds by issuing additional stock in a secondary offering You'll generally have an easier time raising private funds Your business will become more recognizable and gain credibility Business can often attract more highly qualified employees by offering stock options, bonuses, and other incentives with a known market value Public companies are worth more than private companies Important concerns... IPOs are one of the most expensive ways to finance a business - the fees and expenses of 'going public' can reach six to seven figures An IPO is extremely time consuming Many businesses fail trying to becoming IPOs - typically less than 1,000 businesses a year are successful You must keep all shareholders informed on business operations, financial and management conditions, and new legal obligations - Your business could be liable for failure to fulfill those obligations You will most likely lose some management flexibility in your business affairs   Additional Resources Securities Laws, Financial Reporting, and Investor Resources SBA Guide on Selling to the Public - Initial and Direct Public Offerings SEC Statues, Rules, and Forms   Note: * Hyperlink directs reader to a non-government Web site. Message Edited by JamieD on 10-19-2009 01:40 PM Message Edited by NicoleD on 10-19-2009 02:06 PM