Going
Public: three ways.
There are three ways to go
public:
- Initial Public Offering (IPO)
- Direct Public Offering (DPO)
- Reverse Merger
1. The initial public
offering (ipo)
An initial public offering is
one where an investment banking firm is involved in raising
funds for the company going public. Generally, they will
also be of value in after-market support and often by
providing research coverage. While those are clear
advantages, the problem is that the vast majority of
companies will not meet the income, asset, revenue or
capital requirement standards that many investment banking
firms have. As a result, these companies need to opt for one
of the other methods to go public.
2. The direct public
offering (dpo)
The direct public offering is
exactly the same as a traditional initial public offering,
except that there is no investment banking firm involved in
the process. The advantage is that any legitimate company
can go public this way, and their success at becoming public
will not depend on an investment banking firm, investor
interest or 'market-conditions'. Plus, this is the least
expensive way to go public!
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