June 5, 2020  
 
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Going Public

 

Guide for Going Public

Written by Brenda Stokes for Gaebler Ventures

There are many reasons for a business going public. Companies need room to grow and selling parts of the company in the form of stock is one way to do that. But how do you go public with your business?

You want your business to grow, but you can't do it without the capital. Without money, you can't achieve the growth that you are looking for.

That is why many companies sell stake to shareholders while maintaining control over the company. However, you do have to have all of the right documentation in place so that you can sell stake in your company.

Here is how you can take your business public:

  • Your business must be a corporation. The first thing to do is contact a business attorney to help decide which type of corporation is best for your current business situation. The attorney can then draw up the documentation. It is important to have a business attorney to take on the task for you because they are aware of the laws that will work in your favor.
  • Before ever going public, good publicity is important. You must highlight what is so great about your company so that you can gain some buzz for yourself. It is important that people know who you are so that they will buy stake in your company.
  • Your financial records need to be reviewed by an auditor. This is where you need to toughen up your skin a little because you are going to have financial transactions that are questioned and there is going to be a lot of scrutiny. By having financial statements in order, you can easily clear up any questions.
  • A corporate and securities attorney must be contacted. There are certain formalities and rules that you must follow and this is the best way to make sure you are following them. You are going to be running with the big dogs now, so you need good backing. A simple mistake can lead to large financial penalties. Companies have seen their demise due to these penalties.
  • You will work in conjunction with your corporate and securities lawyer to file the necessary paperwork with the Securities and Exchange Commission (SEC), which is a file and registration statement. The statement will then be declared effective by the staff. Once you have everything in order with the SEC, you are ready for stakeholders to start buying shares of stock in your business.

The paperwork that is needed for your business to go public is not like you manually filling out your tax return. The paperwork has to be very precise. A corporate and securities attorney knows how to tailor this paperwork to suit the SEC.

When your business goes public, you are opening your business up to a host of possibilities. You can achieve the capital you need to succeed, while your investors take advantage of your growth. When they sell their shares of stock in your company and you have grown since they invested, they receive a return on their investment.

When investors invest in your business early because you have given them reason to see that you have potential, then the potential of the growth of your business increases even more.

Brenda is a graduate of California State University and a professional writer covering a variety of business topics. To learn more about Brenda, check out her website at The Digital Inkwell.

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