Taking a company public can provide significant benefits for the entrepreneur, management team and shareholders of the private company. Going public provides companies with stock and options plans to provide employee incentives, acquire assets or other businesses, increase shareholder liquidity and maximizes company valuation. All else being equal, a public company has more ways to capitalize on business opportunities. The disadvantages of being public are largely limited to the accounting and legal costs as well as the time it takes to remain current in regulatory filings. Taking a company public can be a life changing event and create significant wealth.

Contact us at 516-509-8132 to learn more about taking a company public.

An initial public offering (IPO) refers to a transaction whereby a private company raises investment capital by selling shares to the public through an investment banking firm. Investment bankers generally represent private companies who can generate meaningful institutional and/or retail interest in their offering so a commission can be earned. Small to medium size private companies without strong financial results or consumer awareness find it impossible to retain the services of reputable investment banking firms. As a result, the vast majority of private companies elect to go public and raise money by completing a direct public offering (DPO). In direct public offerings, the company itself raises money (usually through friends, family, employees, customer, suppliers, etc.) and an investment banking firm is not required. While some companies prefer to hold out for an initial public offering most companies can benefit by completing a direct public offering which can be completed at anytime.

There are many advantages of going public, including:

- lower cost of capital
- broader access to investment capital
- faster time to obtain capital
- wider press/industry exposure
- ability to use stock to acquire companies or assets
- use of options to provide employee incentives
- provide liquidity to existing investors
- means to create significant shareholder wealth

Our firm specializes in helping companies capitalize on the advantages of going public.

We hear about initial public offerings and direct public offerings all the time, but how does a company go public? The process to go public involves accounting, audit, legal and many other steps to satisfy the regulatory and stock exchange requirements. Our firm regularly assists private companies through the entire process to become publicly traded. A private company can go public for as low as $40,000, but typically costs approximate $80,000 – $100,000+ depending on the size and complexity of the transaction. Contact us for more information about how a company goes public.

What is a “DPO”?

A DPO is the abbreviation for Direct Public Offering, which is the term used when a private company is going public without the assistance of an underwriter.

Related Terms:
Going Public
Direct Public Offering
DPO
FINRA
Securities and Exchange Commission
Blue Sky Laws
Market Maker
Lock-up Agreement
Underwriter
Prospectus
Initial Public Offering
IPO
Reverse Merger