IPO Process & Benefits

In an initial public offering you must have a securities attorney file an S-1 Registration Statement with the SEC (Securities and Exchange Commission). You will also typically have a FINRA member broker dealer and market maker involved in your company’s Initial Public Offering.

These broker dealers and market makers professionals will then help you accomplish these two goals:

(1) they will raise capital for your business

(2) They will take you through theIPO process in order to become a publicly traded company.

This is a traditional initial public offering, which is unlike an IPO Dutch auction. You don’t necessarily need to do an IPO to go public. Many companies go public for reasons other than raising money.

Executing the IPO process is a complex procedure. Therefore you want to have a good IPO advisory firm that will act as IPO advisers on behalf of your firm. Initial Public Offerings are not the only way for a business to go public. A company can go public without an underwriter or do a merger with an existing public company. IPO’s are when you do 2 things simultaneously: raising capital and going public.

When a corporation does an IPO the company and its founders may enjoy many advantages and benefits.

The list of benefits may include these items (but there is no guarantee that it will).

  • Generating capital without expensive debt 
    Company’s ability to raise additional money is improved after becoming a public company. Because after the sale of securities it usually increases the net worth of a business & decreases the ratio of equity to debt which can make it easier to borrow and on better terms prior to going public.
  • The shareholders may receive liquidity for their shares of stock
    Company can use stock to acquire other private companies, assets, to barter, and to attract employees.
  • When you go public with a company or do an IPO this can attract the attention of the media as well as the general public. This can generate interest in your company’s stock as well as your product and services.