Why Go Public?

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Why Go Public and why in the United States?

That’s a good question. Why in the world would any self-respecting, revenue producing, private company care to go public and in, of all places, the United States?

Once a company is publicly traded it no longer has privacy. The company has to answer to its investors and comply with all the general rules of the Security and Exchange Commission (SEC). The SEC requires current quarterly (10-Q) and annual (10-K) reports, 8-K current reports and proxy statements, just to name a few. What about the risk and liability? We are talking about the federal government of the United States, The Securities act of 1933 and The Securities and Exchange Act of 1934, to name a few. And the cost of going public is another major issue.

Today you can expect to pay fees from one million + dollars for a full-blown Initial Public Offering (IPO), and it could take from one to several years before you raise one dollar. So you say, “There had better be more than one reason for going public”.

Here are a few EXCELLENT reasons to go PUBLIC
GROWTH When your company has reached a certain level there is no better way to expand and tell the world who you are and that you are a creditable player in the world market today.
MONEY When asked, more companies will tell you raising money through the public is far easier and faster than private offerings and most of the time the cost is about the same or less.
DEBT FOR EQUITY Converting loans to equity has always been the investor’s smarter choice.
LEVERAGE With public stock, your company can attract and keep more qualified personnel.
STOCK ACQUISITIONS With your company’s stock, you can acquire assets and other companies.
EXIT STRATEGY There is no better incentive for an investor than a built in exit plan. With public stock, you have created a secondary means of return on investment that becomes the primary source of return for the investor.
ECONOMY The U.S. economy is Thirteen and one half Trillion dollars and growing.
MARKET The U.S. stock exchange industry is the most trusted in the world.
INVESTORS U.S. public trading companies attract more investors from around the world.
LIQUIDITY The U.S. stock exchanges provide retail and institutional investors with access to U.S. capital markets, which are the largest and most liquid in the world.

Did you know the fastest growing public trading companies in the United States are based in Canada, Israel and the People’s Republic of China?

If your company has the right business plan, good management and a strategic operating plan, it can raise the money required through the public for running its business. Therefore, the question should be “Why not go public?”