While going public is often touted as a cure-all, surefire way to gain funds for a company, it’s not without its drawbacks.  If a company is not in a good position to go public, the decision may actually hurt the corporation more than it helps.  Even as money flows in from the offering, the costs of setting up and maintaining a public corporation are high, and should be taken into consideration before such a drastic step is taken. Even before a corporation actually goes public, the costs are high.  It’s not uncommon for a company to spend a year beforehand just to get the company in shape and gather necessary documents.  Day-to-day activities become difficult as employees struggle to... 

The costs to go public via initial public offering (IPO) or Direct Public Offering (DPO) varies substantially with the type of company, size and complexity. Generally, it can cost as low as $40,000 to go public. We have highlighted the major cost elements to provide a basic understanding. 1. The accounting fees: The financial audits can cost from as little as $5,000 for a complete start-up to $35,000 for a fairly simple business that is generating a few million in sales, to hundreds of thousands of dollars for larger and more complex businesses. 2. The legal fees: The legal fees can cost from as little as $5,000 for a complete start-up to $45,000 for a fairly simple business that is generating... 

A company’s board of directors can play an important role in determining the kind of funding a public offering receives. If going public is your goal, the selection of board members should be given especially careful consideration. The board of directors serves a couple of important functions for a company that has gone public or plans to in the near future. First, the selection of particular board members can send a signal to investors regarding the quality of a company and the expertise behind the scenes. A board that is composed of highly-regarded experts in a field will be viewed much more favorably than a corporation with a board made up primarily of insiders. Knowledgeable outside experts... 

Q: Is it true that we need a specially qualified accounting firm to prepare our audited financial statements? A: Yes. We can recommend a suitable accounting firm once we have a better understanding of your company, industry and needs. Contact us if you are thinking about a direct public offering, reverse merger or initial public offering.  

Q: What exactly is the role of the Financial Industry Regulatory Authority, Inc. ? A: The National Association of Securities Dealers is a non-profit organization whose primary purposes are to: (i) protect investors from illegal actions by listed companies and broker-dealers, (ii) establish and implement rules of practice for broker-dealers and (iii) to arbitrate disputes between broker-dealers and investors. After the Securities and Exchange Commission declares a registration statement effective, the Financial Industry Regulatory Authority, Inc. reviews the details to determine whether the stock should be listed for trading. For more information about FINRA, you... 

Q: What are the blue-sky laws? A: Every state has its own rules and regulations for companies selling securities. These rules are in place to protect investors from companies that have less than honest intentions. Contact us if you are thinking about a direct public offering, reverse merger or initial public offering.  

Q: How long does it take to go public? A: From start to finish, it generally takes between six and nine months – if you know what you are doing, or have someone like us coordinating the process for you. Yes, it can happen sooner, but since much of the timeframe is in the hands of the SEC and FINRA, nobody can really promise it will actually occur faster. Contact us if you are thinking about a direct public offering, reverse merger or initial public offering.