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How do public companies raise money after listing?
Most small public companies keep raising through private placements, selling shares or units to investors they know. As a company gains traction, investment bankers can run registered public offerings. Being public makes these raises easier: investors can see a price, audited numbers and a path to liquidity.
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.
Why do small public companies still use private placements?
Because they are faster and cheaper, and the investors are usually people who already know the company. A registered offering without a banker is possible, but it usually isn't worth the cost and time when you are raising from people you know.
When does an investment bank get involved?
Once the company has real traction: revenue, growth and a stock that trades. Then bankers can run registered offerings and bring their own investors. Before that, few will take on a small company.
Who invests in these raises?
First the company's network: customers, suppliers, industry people and high-net-worth individuals who know the founder. Later family offices, and institutions once there is enough traction. See who invests in micro-caps.
How does being public help a raise?
Investors can see a market price, audited financials and regular filings, and know their shares can become tradable. That is one of the four levers of being public: easier access to capital.
Can a public company use stock instead of cash?
Yes, for acquisitions, hiring and partnerships. Even so, for acquisitions we generally recommend raising cash from long-term investors and paying sellers in cash, because sellers who want cash tend to sell the shares they receive.
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