How does a company go public?

Any company can go public, with no minimum level of sales; profits or assets, just making sure the right requirements are met.

There have been many articles written about the process of taking a company public and the benefits of active participation in the global equities market.

The process to go public via initial public offering (IPO) or Direct Public Offering (DPO) involves a variety of steps.
Going public via IPO:

These steps are:

1. Engage professional advisors
2. Organize corporate and financial books and records
3. Identify most appropriate legal and accounting resource.
4. Complete financial audit
5. Identify investment banking firm
6. Complete registration statement
7. File with Securities and Exchange Commission
8. Clear the SEC review and comment process
9. Complete the public offering
10. File with the appropriate stock exchange

You can use the same steps for DPO or direct public offering. The main thing to look at is that a DPO has no underwritten or investment banking firm.

The company is responsible for identifying at least the minimum number of investors that will qualify the shares for trading.

Reverse Merger

Your company can go public through a reverse merger if you are a well-established business, a start-up or still in the development stage.

If you want to go with a reverse merger as an alternative strategy, by which your private company seeks and acquires public listing and becomes a publicly traded company. In a reverse merger, a private company merges with a public company and continues as the dominant successor entity. Optimally, the public entity has no assets, liabilities or operations before, or concurrent with the merger

However, reverse mergers are appropriate for companies that do not need capital quickly and that will experience enough growth to reach a size and scale at which they can succeed as a public entity.

When a company is private, you have a lot more freedom to take it where you want, since yours is the only vision you need to satisfy.

For a company to be successful going public, they must be able to provide accurate and detailed information to the stockholders and to the public. Therefore obtaining the sales requirements will be mandatory.

Companies that have gone public will achieve a much higher degree of liquidity for their investment. Stock of a privately held corporation is generally an asset without a readily available market or an easily determinable value.

A publicly traded company, however, has a ready market for its stock at quoted prices. In addition to the portion of their stock that the founders may have sold as part of the original public offering, the founders will have the ability to sell additional shares for diversification or other reasons, although such sales may be subject to significant limitations.

The small business administration along with the SEC has guidelines and help products to ensure the success of your company whether it be going public or just getting some loans.

Due to the complex interaction of the many issues discussed above, it is usually never too soon to begin the "going public" planning process. To successfully "go public" and then deal with life as a public company, it is important to work with experienced advisors whose judgment you can trust.

For your company's success in which moving ahead to becoming publicly traded, be sure to do your research and be prepared to look into all the requirements and options. Start with picking the right financial adviser. We all do our jobs per what we know, and they know the publicly traded plans.