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Can a software company go public?
Yes. Software and SaaS companies can go public without an IPO through a direct listing on the OTC market. We have taken two SaaS companies public, SMTP and CDbeat, both by direct listing. A software company doesn't need to be large. It needs recurring revenue or a credible path to it, a founder who executes, and investors who know the founder.
Joel Arberman, Meraki Partners · Reviewed October 2026. Based on 17 companies taken public since 1999: 11 by direct listing, 4 by reverse merger and 2 by IPO.
What do investors look for in a software company?
Recurring revenue, growth, retention and gross margin. Investors in a small public software company want to see that customers stay and pay more over time, and that growth doesn't depend on spending more than the company can raise.
Why would a software company go public?
To make acquisitions, to hire and keep engineers with stock options that have a visible value, and to raise capital at a valuation the market recognizes. Small software companies are often bought for a modest multiple of revenue; public ones can be valued on growth.
What is different about taking a software company public?
Revenue recognition. Subscription and multi-year contracts must be accounted for under ASC 606, and software development costs may be capitalized or expensed depending on the stage. Getting this right before the audit avoids restatements and delays.
Which software companies are a good fit?
Founders with paying customers, recurring revenue or a clear path to it, and a plan that uses public stock: acquiring smaller software companies, hiring engineers with stock options, or raising growth capital at a public-company valuation.
How does a software company go public?
The same way as any other company: raise from the people who know you, typically $500,000 to $2 million from about 50 people, get two years of audited financials (or audits since incorporation, if the company is newer), file a registration statement with the SEC, clear its comments, and have a market maker file the Form 211 so the stock can be quoted on OTCQB. A direct listing takes about 10 months; a reverse merger about six.
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Tell us where you are, and we’ll set up a first conversation about whether going public belongs in your plan and what it would take. If it isn’t right for you, we’ll say so.