Taking a company public can have many benefits. By going public a company may put themselves in a position to gain more recognition, more investors, and more sales. Here is an overview of the process by Stephen Taub that will give companies an idea of steps to take in order to go public.
IPO - Initial Public Offering: The most commonly used method for going public is for a business to do an IPO. The first step to initiating an IPO is registering with the Securities and Exchange Commission (SEC). The business will not be able to sell securities until the date specified in their registration, even though the company is officially public as soon as the registration form is filed.
ACE-NET - Angel Capital Electronic Network: The Angel Capital Electronic Network is an even less intrusive option than both the DPO and IPO. The ACE-NET is an internet network that allows companies to connect with investors and still stay within the guidelines of both state and federal laws. Mostly small businesses take advantage of this form of going public. Each business displays a business plan on the network. Other companies are able to review the business plans without having to contact the business.
DPO - Direct Public Offerings: Direct Public Offerings is another method through which a company can go public. This method is similar to an IPO, except that it is less intrusive to a company. Also, DPOs will serve as a method for financing a company and at the same time market the company. This method is very popular for companies to use before they ever attempt to begin the registration process for and IPO.
Below are only some of the main advantages of going public on the Frankfurt Stock Exchange that your company can surely benefit from.
1. Income: The greatest advantage of going public is that it creates a positive cash flow. For a company experiencing financial difficulties this option is far better.
2. Employees : Going public will attract a better calibers of employees as the increased cash flow can give you the means to offer greater incentive packages such as employee stock options and estate planning.
3. Value: After selecting the going public, it increases in value of your company from the very start of the process. Private companies are generally valued at four to six times their earnings but publicly traded companies are valued at up to twenty times their earnings.
4. Publicity: The major benefit of going public for your company is publicity.
No matter which method a company uses in order to go public, they should always make sure to do thorough research. In this case, thorough research may include consulting with a securities attorney who is familiar with both state and federal securities laws. Companies may decide to just go for it and register with the SEC and pursue and IPO, they may decide to use less intrusive methods of going public like a DPO or ACE-NET. No matter which method, each company will be on their way to being more public and potentially attracting investors.
