Steps to take your company public

Taking a company public can have many benefits. By going public a company may put themselves in a position to gain more recognition, more investors, and more sales. The process for taking a company public can be very complex, especially since there is more than one way to do so. Here is an overview of the process that will give companies an idea of steps to take in order to go public.

Initial Public Offering (IPO)

The most commonly used method for going public is for a business to do an IPO. The first step to initiating an IPO is registering with the Securities and Exchange Commission (SEC). The business will not be able to sell securities until the date specified in their registration, even though the company is officially public as soon as the registration form is filed. This registration is going to make certain parts (essential facts regarding business operations, financial status, and management) of the company available to potential investors who would like to see it.

When a company has decided that they need to go public, they must decide in which state to carry this out. Companies should research each state in order to understand their tax laws, privacy laws, and the conditions they require when it comes to the way a company wishes to operate. All of these elements play an important role in how a company goes public and where. Companies should find a state that has laws that most closely mirror their needs and willingness to disclose information.

Direct Public Offerings (DPO)

Direct Public Offerings is another method through which a company can go public. These are also known as Small Corporate Offering Registration. This method is similar to an IPO, except that it is less intrusive to a company. Also, DPOs will serve as a method for financing a company and at the same time market the company. This method is very popular for companies to use before they ever attempt to begin the registration process for and IPO. The reason is because DPOs give the business an opportunity to see what their stocks will sell for without investing the time and money involved with an IPO.

Angel Capital Electronic Network (ACE-NET)

The Angel Capital Electronic Network is an even less intrusive option than both the DPO and IPO. The ACE-NET is an internet network that allows companies to connect with investors and still stay within the guidelines of both state and federal laws. Mostly small businesses take advantage of this form of going public. Each business displays a business plan on the network. Other companies are able to review the business plans without having to contact the business. Then, if they are interested in investing, they may contact the small business in order to start negotiations.

No matter which method a company uses in order to go public, they should always make sure to do thorough research. In this case, thorough research may include consulting with a securities attorney who is familiar with both state and federal securities laws. Companies may decide to just go for it and register with the SEC and pursue and IPO, or, they may decide to use less intrusive methods of going public like a DPO or ACE-NET. No matter which method, each company will be on their way to being more public and potentially attracting investors.