You've pulled one lever. There are three more.
A crowd raise is capital, and you did it the hard way: you convinced people who looked closely to invest. The other three levers, talent, opportunities and acquisitions, are what make the raise worth it, and a smaller company gets far more out of all three as a public company.
Led by Joel Arberman, who has taken 17 companies public, several of them his own, and prepared offerings for companies raising under Reg CF.
Apply for the Program How it works
Planning a raise but haven't filed yet? Start on Starting Up, or go straight to The Four Levers Program. Raising under Reg A+ instead? That page is here.
A Reg CF raise proves demand. It doesn't build the company.
You filed a Form C, ran a campaign and raised from the public, possibly on not much more than a story and a plan. That is a real achievement: a few hundred people chose you over everything else they could have done with the money.
It also leaves you with a particular set of facts. The money is usually enough for the next milestone and not much more. Your financials may be reviewed rather than audited, or neither. You have a shareholder list that is long for a company your size, and every name on it holds shares with no market. And the people, partners and acquisitions that would turn the plan into a business still have to be found and paid for, mostly with equity nobody can yet value.
What changes when a company your size is public.
Capital is one of the four levers that grow a company. You've pulled it, and that's a real achievement. The other three are what make the raise the right decision, and a smaller company gets far more out of all three as a public company than it can as a private one.
Talent
Stock with a market price is something a senior hire, an industry veteran or a sought-after adviser can weigh. Private equity in a young company is a promise; listed stock is a number. One founder had spent months trying to hire a president who wanted a share of the company. A week after he committed to going public, the same candidate accepted options at a fixed price, on the same salary and bonus.
Opportunities
Partners, lenders and suppliers can check a public company without asking; the financials are already on file. When you can't reach the customers, recruit the people who already know them. One company brought on six or seven advisers with thirty years each, for options and no cash. They helped position the company better and connected it with prospective clients it would not otherwise have reached.
Acquisitions
Stock becomes one more way to pay. Owners ready to sell will consider shares they can price, alongside cash, a note or a preferred share, from a transparent public company; they rarely would from a private one nobody knows. A company that could never buy anything starts to be able to.
Capital gets easier too. Investors can see a price, read the filings and, in time, sell, so later raises can come on better terms than the first. But that is the lever you already know how to pull. The other three are where the value is.
Your investors will ask how they ever get their money out.
Sooner or later, every one of them asks. The honest answer today is "when the company is sold, or when it lists, and we don't know when either will happen." That answer gets harder to give with every round, because every round adds investors and raises the price.
A listing gives your shares a market. Whether any given holder can sell, and when, depends on the rules that apply to their shares and on whether there are buyers. We help you understand those rules before you say anything to investors, and what you say is a matter for your securities counsel. What a listing gives you is a considered answer, and a company with one raises more easily next time.
Nasdaq is the answer everyone pictures. For a Reg CF company it is usually the wrong first step.
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 has just raised under Reg CF cannot carry that cost. There is also the question of price. A company that raises round after round at higher valuations and then lists is asking the market to support a price it has not earned. If the market disagrees, the stock falls, and with it every advantage above.
Most of the companies our founder has taken public listed on the OTC market first, by direct listing, at modest valuations, and built from there. Some later moved up to Nasdaq when the business had earned it. One went from a $3.5 million listing to a $240 million sale.
If you're building it, it holds. If you're inflating and you list, it pops.
What a Reg CF company usually has to add before it can list.
Audited financials
A direct listing needs an audit. If your campaign used reviewed statements or none, this is the first and largest gap, and the plan says how long it takes and roughly what it costs.
A clean cap table
Crowd rounds, SAFEs, notes and early shares have to add up to one clear share count before a transfer agent will work with it.
Corporate records
Minutes, agreements, option grants and a data room. Most companies at this stage have gaps, and they are fixable.
A reason to list now
Which of the three levers you would actually pull in the next two to three years. If the answer is none of them yet, the verdict is "not yet," and the playbook says what to do first.
Not every crowdfunded company should list. We'll tell you which you are.
A good fit if you
- Are raising, or have just raised, under Reg CF, and have done what you told investors you would do so far
- Have a product in the market, or close to it, and a use for talent, partners or acquisitions in the next two to three years
- Have financials an auditor could work with, or a clear path to them
- Can treat a $10,000 plan as a normal business expense, not a stretch
Probably not yet if you
- Raised less than the plan needed and are counting on a listing to fix that
- Have a milestone you should hit first, gaps in the team, or a product that isn't ready to scale
- Are still waiting on an approval that decides the business
- Expect a listing to deliver a price. It gives your shares a market. The business sets the price.
Not ready yet? The Four Levers Program still applies. It tells you how to pull the levers while private, what would need to change before a listing makes sense, and in what order. A clear "not yet" is a good outcome for $10,000 too.
How it works
Four steps, in order. Every step is optional and agreed in writing before it starts. You can stop after any step and owe nothing further.
Plan: The Four Levers Program
Four one-to-one working sessions and a written playbook built around your company: a straight verdict on whether listing belongs in your plan now, later or never; the OTC market or Nasdaq, and why; the gaps above and how to close them; and a 90-day action list. About 30 days. $10,000, fixed, and nothing owed after. Read about the program.
Raise
You're already raising, so this step is usually skipped. If the plan calls for another round before a listing, Raise-Ready is $15,000, fixed, with 90 days of support.
List
With the shareholders and the audit in place, we manage the direct listing and coordinate the auditors, securities lawyers, transfer agent and other specialists. A monthly fee plus equity, agreed in writing before it starts.
Build
Once you're public, ongoing strategic advice on the three levers: hiring with stock, partnerships, acquisitions, investor communication, and moving up to a larger exchange when the business has earned it. A monthly fee plus options.
What it costs. Every engagement starts with The Four Levers Program: four one-to-one working sessions and a written playbook, about 30 days, $10,000 fixed, with nothing owed after. If the plan calls for a raise, Raise-Ready is $15,000, fixed, with 90 days of support. 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.
Third-party costs are additional and paid directly to those providers: accounting, audit, legal, stock exchange, transfer agent and filing fees. We'll estimate them once we've seen your financials. As a guide, a direct listing typically runs $300,000 to $500,000.
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 these costs. Your own outlay is the plan and the preparation.
What this is not.
We don't raise money or sell stock
We're not a broker-dealer, we have no investor list, and we never contact your investors.
We don't promote stocks
We help you report results plainly, the good and the bad.
We don't write your offering materials
Anything you tell investors about a future listing is a disclosure matter for your securities counsel and your offering documents. The playbook informs your plan; your counsel decides what goes in front of investors.
Who you'd be working with
I'm Joel Arberman. In 1999 I took my own startup public with almost no money, writing the registration statement myself because nobody would help a company that small. Once our shares traded, a development firm took half its fee in stock, a PR agency took all of its fee in stock, a well-known venture capitalist joined our board for options, and we bought another company entirely with stock.
Before that I was an equity analyst in New York and, at 22, a partner at a 700-person investment bank. Over more than 30 years, across Wall Street, Bay Street and my own companies, I've taken 17 companies public, several of them my own and a dozen with no revenue. I'll tell you honestly whether this fits your company, and if it does, I'll be beside you for every step.
Questions founders ask.
We're mid-campaign. Is this the right time?
It is the best time. The plan tells you what a listing would be for before you set the terms of the next round, and before you say anything to investors you would rather not have said.
We raised less than $1 million. Does any of this apply?
Often yes, but the audit and the cap table are real costs at that size, and the verdict may be "not yet." You'll know in 30 days rather than guessing.
Will our investors be able to sell?
A listing gives your shares a market. Whether a given holder can sell, and when, depends on the rules that apply to their shares and on whether there are buyers. We don't promise liquidity, and neither should you.
Our portal said we could list on Nasdaq later. Why not wait for that?
Because the waiting is the problem: the cost comes first and the valuation second. See "OTC now, or Nasdaq later" above.
What if the verdict is "not yet"?
Then you'll hear that, with the reasons, and the playbook covers how to pull the four levers without a listing, or what would need to change first.
One lever down. Three to go.
Apply for The Four Levers Program. If we're not the right fit, we'll say so on the first call.
Request a first call.
Tell us about you and what you're building, and we'll set up a first conversation if it looks like a fit. No cost, no obligation.