Transitioning from a privately held to public company isn’t for everyone. Initial public offerings can be challenging transactions, but also offer serious benefits.
For those going that route, an IPO offers increased visability and the ability to raise capital (by selling stocks or bonds). But the process is a costly, time-intensive one – and involves significant operational changes.
Paying attention to the timing of your IPO is key, Lamm and Scileppi say in the article. Adequate resources, a solid business plan and expected profitability are critical to timing a company’s IPO, they say.
Even after a company has sucessfully gone public, the way business owners are used to operating can change dramatically, according to Lamm and Scileppi.
For example, once a company has shareholders, its new reporting requirements include filing periodic earnings reports with the Securities and Exchange Commission.
Additionally, business owners and executives may unexpectedly find themselves in conflict with their board of directors, government regulators and even their investors – all of which can affect a company’s bottom line.
Read the entire article: Top 5 considerations in a challenging IPO market (Daily Business Review, 7/14/16) note: subscription required.
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