FAQ
Questions founders and advisers ask
Straight answers on cost, our role, life as a public company and referrals. If your question isn't here, ask us on a first call.
Cost and terms
Should we go public to raise money?
On its own, money is the weakest reason to go public. Early-stage companies that list only for capital rarely make it, because capital funds growth but does not create it. The growth comes from the other three levers, talent, opportunities and acquisitions, and they are what move valuation. If raising money is the only goal, you need a financing, not a listing.
What does it cost?
The first step is The Four Levers Program: four one-to-one sessions and a written playbook, about 30 days, $10,000 fixed, with nothing owed after. If your plan calls for a raise and you want help, Raise-Ready is $15,000 fixed, with 90 days of support. A listing, and the advisory work after it, are on a monthly fee plus equity, agreed in writing before each step starts. You can stop after any step and owe nothing further.
What about third-party costs?
Accounting, audit, legal, exchange, transfer agent and filing fees are paid directly to those providers. They vary widely with your accounting, audit and legal situation. As a guide, getting listed typically runs $300,000 to $500,000 for a direct listing, $400,000 to $600,000 for a reverse merger, and $600,000 or more for an IPO before underwriting. Staying public then typically costs $200,000 to $400,000 a year for an earlier-stage company on the OTC markets, and $400,000 to $600,000 or more for a later-stage company or one listed on Nasdaq. You don't need this money sitting in the bank. In almost every case, the private placement is structured so you and your team can raise capital from your personal and professional networks to cover the listing costs, often with growth capital on top, and sometimes capital for acquisitions too. Your own outlay is the plan and the preparation. The people who already know you pay for the rest.
What do the public-company costs actually buy?
Transparency. The audits, the legal work and the filings create a public record that a stranger can check without asking your permission. That record builds credibility, credibility builds trust, and trust is what makes customers, lenders, partners, investors and sellers comfortable dealing with you.
Where do founders find the first $10,000?
Most cover it from personal funds. If you like, it can be treated as a loan to the company and repaid from the capital you raise.
What happens to your equity if we part ways early?
The plan and the preparation are fixed fees, and no equity is issued to us until a listing engagement is agreed in writing. If your raise falls short, you can stop there and owe nothing further. If a listing engagement ends within its first 90 days, any equity we hold is cancelled.
What if our raise takes longer than planned?
Many do. While you raise, we can work on the growth side of the business, or we can pause the engagement until you've raised what you need.
Is this Meraki Partners or PublicFinancial.com?
Both. Meraki Partners, LLC offers its public listing services at publicfinancial.com and stand-alone raise preparation at preparedtoraise.com. We're not affiliated with Cisco Meraki.
What we do, and what we don't
What do you do that our lawyer and auditor don't?
We handle the strategy, advise you at every step, and coordinate your securities lawyer, auditor, transfer agent and the other specialists so the whole process moves together. Each of them does one part; we run the plan.
Who will work on our company?
Joel Arberman leads every engagement personally and brings in the lawyers, auditors and other specialists each step needs.
Are you a broker-dealer? Will you raise money for us?
No. We prepare you to raise, and you raise from your own network. We don't find, contact or introduce investors, sell or negotiate the offering, or handle investor funds. And be careful: anyone who promises to raise capital for a start-up or pre-revenue company is almost certainly lying.
Do you own the shells you recommend?
No, with one current exception: a TSX Venture shell we control.
Do you promote stocks?
No. Our founder gave up his own investor relations firm, in part because promotion was what most callers wanted. We do help companies reach investors properly: reporting results plainly, the good and the bad, with a clear deck, website and investor section.
Who do you turn away?
Founders with no record of executing, companies whose own network won’t invest in them, and businesses that harm people or animals. If people who know you won’t invest, they may know something we don’t yet.
Isn’t your advice biased toward going public?
It’s a fair question. Part of our compensation is equity when a company lists, so a listing that shouldn’t happen earns us nothing but lost time. That’s why the first step is a fixed-fee plan with a straight verdict on going public now, later or never, and why we tell most owners it isn’t for them.
Life as a public company
How do we get enough shareholders, and is that legitimate?
Through a real private placement: investors, mostly people who know you, who pay a real price for their shares. A listing needs a minimum number of shareholders, and we size the raise so you have them.
How do we pay for years of public-company costs?
We size your first raise to cover the listing, your operating runway through it, and your first two to three years of being public.
When can founders and early investors sell?
Generally once shares are registered or a holding period has passed. Rule 144 sets those holding periods and, for officers, directors and large holders, limits on how much can be sold at a time. We map this out before you list.
Can I sell my shares gradually?
Yes, over time and within those rules. That's still far more than a private company offers, where you can't sell any of your shares until the whole business sells.
Can our investors buy through Schwab or Fidelity?
Yes. Shares quoted on the OTC markets can be bought through major brokers such as Schwab and Fidelity. Some brokers add a few steps for lower-priced stocks, and we'll walk you through what to expect.
Will we need a new auditor?
Usually. A public company's audit has to come from a PCAOB-registered firm. Your current accountant can often keep your tax and bookkeeping work.
Should we aim for Nasdaq or the OTC market?
For most smaller companies, the OTC market first. A Nasdaq listing brings requirements the OTC market does not: board committees, paid independent directors, directors’ insurance, and higher legal, audit and listing fees. In our experience the difference can be half a million to a million dollars a year or more. A company that lists early, at a modest valuation, has years to build value with the four levers. If you’re building it, it holds. If you’re inflating and you list, it pops.
For advisers
Do you pay referral fees?
Yes. We offer a referral fee when a company you introduce becomes a client. It's tied to the engagement, never to money the company raises.
Will I stay involved with my client?
Yes. A company going public needs more outside help, not less, and we keep you informed at each step with the company's permission. How referrals work
Is going public right for your company? Answer 8 questions and get a straight answer in about 2 minutes. Take the free quiz
Still have a question?
Ask it on a first call. If going public isn't right for you, we'll say so then.