What Are The Advantages To Taking Your Company Public? – PIPE Loans – S1 Filings – Corporate Expansion
Companies decide to go public for many different reasons: expansion, need for capital, exit strategy, acquisition facilitation, globalization etc. But what are the real advantages to going public? First, let’s go over the disadvantages. Your life becomes an open book and as an executive your spending habits and failures will be a matter of public information with your annual and quarterly filings. You’ll be accountable to shareholders. You’ll have a board whose main interest is the company and the shareholders no you or your need for a new luxury car, financial bonus or need for a quick loan from the company that was once possible and easy when your company was a sole proprietor entity. You need trading volume and without it your stock is worthless and your company becomes a blind, deaf, mute, quadriplegic (a bit extreme but you get the point).

The advantages are numerous if your company is ready for the public realm. With a solid trading volume, minimal dilution of stock, solid executive management, an active board of directors, powerful strategic alliances and the ongoing advisory of a strategies consultant your company can expand globally, identify and grow through acquisition and subsidiary mergers, purchase entities and services with stock to retain cash flow. Banks and other institutional lenders will make more funding solutions available. Your exit strategy is built in and turn-key.

The most successful public companies have a few common themes built into their infrastructure. They have recruited a proven and tested CEO, CFO and COO with professional pedigrees and track records that are recognized in the industry and media and will bring with them a strong following of partners and solution mechanisms that will typically yield instantaneous, empirical results on behalf of the company. The board of directors is restructured so that major industry enhancing components are represented such as industry niche legal, financial, distribution, domestic and international. Each of these board members will put their contact portfolio to work for your company for immediate and long term growth and stabilization. One other aspect that all prosperous public entities have is a strategies consultant that keeps everything in line. This individual is also what is referred to as a ‘fixer’. This professional will typically stand in the background constantly analyzing every aspect of the company for weak points and correct them. Whether it be a lazy board member, potential acquisition, CEO not pulling his/her weight, potential legal issues etc., this strategist has a keen eye and typically a massive contact base that, when put into place can correct virtually any situation quickly and seamlessly.

Going public is a great strategy for the right organization. Having all your ducks in a row pre and post public is the key to a successful offering and public markets longevity.

Before you decide to go public or expand your company’s product or service offering, allow me to paint a picture for you. You’re on a crowded beach, the water is warm, the waves are calm and you decide to break away from the crowd and confidently swim a little further than everyone else. All is calm; the sun gently warms your back as one stroke after the next takes you further from the beach and closer to the distant horizon. A few minutes later the sun is covered by clouds and like a bomb ‘BAM’ a crack of thunder, lightning lights up the sky and buckets of rain begin to pour from gray clouds. You look back and the entire beach is deserted.

The lifeguard shack is empty and the waves begin to build. You’re trying to swim back to shore but the current violently drags you out further into the ocean. You fight to stay afloat as one wave after the next crashes upon you. Your lungs fill up with water, you’re muscles cramp and just as you’re about to give into your fate, the rain stops and the water becomes calm. You can gather just enough energy to begin to swim back to the beach. All of a sudden you feel a bump on your thigh and then a sharp pain on your foot as you’re drug down into the darkness and as you fight to free yourself you notice that you’ve unknowingly swam into the center of a starving school of sharks and they take turns gnawing off pieces of your flesh.

Your arms, back, legs, neck, face, chest and feet all shredded by the razor sharp teeth of sharks. The blood only attracts more sharks of different colors and shapes. All you can do is kick, punch and scream to keep your limbs intact then suddenly you feel sand beneath your feet, you’ve reached the shoreline and you craw with every ounce of strength you have left toward the abandoned lifeguard shack. Once you’re on land you look out at the ocean and the entire expanse of the water is teaming with sharks. You look down at your body and though in one piece has been ripped to shreds.

This is the most accurate description I can give of what it’s like to try to go public or expand globally without the proper game plan and consultants watching your back and helping you contemplate your chain of moves as you go forward. There is an entire industry out there that is just waiting for you to step off the path and into the shadows so they can get a piece of you. Wasted capital here, wasted capital there, it all adds up.

When taking your company public or planning a product or service expansion into outside geographic proximities why go it alone? Seek out qualified consultants that can navigate you through the shark infested waters so that you can achieve your goals quickly and with as few bumps in the road as possible.