Frequently Asked Questions
What's your ideal client?
Any company can go public, including startups. There are no minimum revenue, asset, or profit requirements to go public in the United States. We routinely represent startups and early-stage companies with no revenue based on the strength of the entrepreneur & team. However, our ideal client is already generating $1+ million in EBITDA or $10+ million in revenue, can grow organically and by completing acquisitions.
What is a direct listing, initial public offering, and reverse merger?
- In a direct listing, a private company goes public without an underwritten offering. The rules and regulations are similar to an initial public offering (IPO), but a direct listing does not require an investment banking firm. Most of our clients go public through a direct listing.
- In an initial public offering (IPO), a private company completes an offering of stock to the general public, with the support of a licensed investment banking firm.
- In a reverse merger, a private company takes control of a company that is already publicly traded.
Which stock exchange would my company trade on?
Companies that complete an initial public offering will trade on the New York Stock Exchange or NASDAQ. Companies that complete a direct listing or reverse merger typically trade on the OTC QB or OTC Pink and upgrade to a senior stock exchange whenever they qualify.
Who determines my valuation?
Our managing member was formerly a partner of a 700+ person investment banking firm and analyst at two asset management firms. He has completed research, analysis, and evaluations on a wide range of companies. With sufficient information about your business, he can provide a recommended valuation range for your company. However, the final valuation in a direct listing and reverse merger is determined by the entrepreneur. For initial public offerings, the investment bankers determine your valuation.
How much capital can be raised?
For direct listings and reverse mergers, entrepreneurs can raise millions of dollars from their personal and professional networks, as well as through general advertising. For initial public offerings, investment bankers can raise significant capital depending on the specific business and market conditions.
As consultants, we do not raise capital for our clients but routinely introduce qualified clients to investment bankers who are licensed to raise capital.
What does it really cost to go public?
The initial investment to start the process ranges from $25,000 to $100,000, plus equity. Then, entrepreneurs can leverage "OPM" (other people's money) to pay for the rest. Even if you already have all the necessary funding, we help clients structure a private placement so their friends, family and business associates can invest prior to a public listing and fund all the go-public expenses.
The total cost to take a company public will vary based on the size and complexity of business and the method by which it goes public. A direct listing can be completed for as low as $250,000, a clean reverse merger can be as low as $450,000 and initial public offerings typically cost more than $600,000.
Will investors kick me out of my own company?
You’ve been watching too many movies. Entrepreneurs and executive management are generally removed only if they engage in criminal, unethical or immoral behavior. When investors are upset when management teams fail to deliver the promised performance, they typically just sell their stock rather than spend the time, money and headaches required to try and remove founders or management.
How long does it take to go public?
A reverse merger can be completed within four months, an initial public offering within seven months and a direct listing generally takes about ten months to complete.
Do you provide investor relations services?
We do not provide investor relations services, but our founding managing member has investor relations experience and can provide you with general advice to design and implement a cost-effective investor relations program. Generally, we do not recommend that early-stage companies distract themselves with the time or capital needed to implement an effective investor relations campaign. We believe that companies producing increasing revenue and profits will attract their own investor following. We make IR firm recommendations for larger clients.
What exactly do you do?
We develop the public listing strategy based on our clients' unique facts and circumstances, bring in all third-party professionals (accounting, audit, legal, etc.), advise clients through the process and manage everything on their behalf. We are the "CEO" of the initial public offering, direct listing or reverse merger. It's important to have a very experienced advisor to help you navigate the steps required for a private company to become publicly traded. Our team has facilitated many public listings that helped CEOs create more than $9 billion in shareholder value.
What do you charge for your services?
We charge a cash fee on engagement and additional fees on key milestones, plus an equity fee based on the scope of services and value we anticipate adding.
How did you start helping entrepreneurs go public?
In 1999, our founder started a software company, promised investors that he'd take the company public and then struggled through the process since there were no advisors, law firms or investment bankers willing to help his startup go public. Although it was a difficult process, he successfully took his first company public in a direct listing. Within a few years of his first direct listing, he took three of his companies' public. We now help CEOs complete initial public offerings, direct listings and reverse mergers.
Will you help my company go public?
We are always looking for smart entrepreneurs to represent. Contact us to discuss further.