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Go Public & Public Companies

Definition of a Public Company

When you want to become a public company and go public you offer SEC registered stock and securities for sale to the public. This is usually done through a stock exchange, such as the AMEX, NYSE, etc. You can also become a reporting public company with the SEC. The company will file an S-1 registration statement with the SEC, and must follow other procedures including blue sky laws. Usually a public company is owned by many investors, while a private company is owned by a few shareholders and principals. Although a company may have many people with shares of their stock, that doesn't mean it is a public company. The process of taking an existing company from private company status to public company status is called the "Go Public" process. Tiber Creek can typically move clients through this process, to create a public company, expeditiously. This is why we are called the “How to go public” experts.

Advantages of Being a Public Company

Public companies are companies are able to raise capital by selling stock to the general public if they file an S-1 registration statement become effective. This is the reason so many companies desire to go public, either through direct public offerings or Initial Public Offerings (IPO). Before publicly traded companies were around, it was very difficult to raise capital in large amounts for private companies.

Becoming a public company - or an SEC reporting company - is a prime consideration for private companies ready to take the next step in their development; going public is one of the most generally reliable mechanisms available to take advantage of the capital markets. The average time required to take a private company public typically is several months (please see the Securities and Exchange Commission). Businesses must provide financial information to satisfy US federal reporting and audit requirements, meet certain standards of due diligence and other investor surety, pay whatever fees are required to complete registration and licensing, and they are ready to be listed and begin participating in one of the most active trading markets in today's economy, and realize all of the benefits of this market economy.

Business Consultants and Management Consulting

You will want to have a firm that is a Management Consultants expert. When you go public you must have business consulting that has a great deal of experience in the process of help a company to go public and become a public company. Then you put yourself in a position to avail yourself or the opportunities available to public companies. The advantages available to a public company are significant, and include:

Visibility and Credibility - As a public company's market profile and financial transparency increases, its investor relations profile is enhanced and could help stock sales, also investor interest typically increases. Public companies, simply by virtue of being public may be able to attract or trade for advertising along with media and investor attention, which private companies are unable to attract. Investors know that public companies have passed stringent audit requirements of Sarbanes Oxley, under the oversight of entities such as the PCAOB which stands for the Public Company Accounting Oversight Board and the SEC.

Easier Access to Capital - Capital is usually much easier to attract and obtain as a public company, than as a private company seeking venture capital, seed capital or start-up funding. Investor confidence and interest is normally much higher, with public companies than with private businesses. Public companies usually get higher market valuations which hopefully will yield more favorable terms and equity leverage.

Cheaper Capital - Capital funding and business financing for public companies is usually one of the more desirable ways to raise money because of the business valuations a public company will usually receive. The business finance or corporate finance costs of public company can be less than a private company. There are more avenues of business financing and equity investment capital available. The cost of funding a business should drop dramatically once it becomes a public company, due to the varied funding options available to public companies that report to the Securities and Exchange Commission. (SEC)

Alternative Compensation Options - Public companies may also issue their stock to key employees and executives as an additional incentive. This can help them attract and retain high-caliber employees for the long run, which will in turn make their business more of a well-oiled machine.

Company Valuation – Typically, increased market valuation is another advantage of being a publically traded company. Value typically increases by simply being a public company with a stock symbol. A public company often sells at prices earnings ratios or PE ration of its annual earnings, compared to private companies, which traditionally command market pricing of lesser multiple of annual earnings.

The How to Go Public Consultants

Our specialized business consulting staff, with offices in Washington DC and Los Angeles, CA allows you to navigate the complexities of taking your company public with ease and confidence.

We assist you with S-1 registration statement filing and other financial reporting requirements to comply with rules established by the SEC (Securities and Exchange Commission), and the Public Company Accounting Oversight Board (PCAOB).

Please take the time to view our website which covers topics such as: IPO’s (Initial Public Offering) and also DPO's (Direct Public Offerings). When you go public, there are many benefits and advantages to direct public offerings compared to an IPO or public shells for sale and reverse mergers. These strategies, and other Go Public market mechanisms and growth strategies for a public company are discussed in detail throughout the website, so that you can learn how to go public and to create or start a public company.

 

 

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