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Pros and Cons of Going Public

Advantages of Going Public

Entrepreneurs seek to take companies public for many reasons, including:

  1. To raise funds through increased access to capital; and
  2. To create or increase liquidity in the company’s securities, which can provide shareholders with a hope of selling their stock in the open market.
  3. To fund a roll up strategy, in which they acquire other businesses using the public company’s stock as currency.
  4. To attract and compensate consultants and employees by using the public company’s stock, such as in an S-8 Plan.
  5. To create investor awareness of the public company’s brand and technology.

Perceived Disadvantages to Going Public

Entrepreneurs perceive some disadvantages to taking a company public, such as

  1. Going Public via S-1 Registration Statement requires time and some money to complete.
  2. Administrative compliance for SEC filers includes audited financials, and filing SEC reports like 10-K, 10-Q and 8-K.
  3. The public company’s shareholders must be aware of and in most cases approve your corporate actions.
  4. Transparency is required, since financials and disclosures are all available to the general public.

In the end, the decision to go public is made by entrepreneurs who believe that transparency is a good thing, and that securities compliance is a small price to pay for the potential upside and liquidity that is possible for shareholders in public companies.

OTC Markets Securities Lawyer Taking Companies Public

Entrepreneurs can discuss going public under a flat fee via S-1 Registration Statement on the OTC Markets or OTC Bulletin Board with securities lawyer Matt Stout at (410) 429-7076 or mstout@otclawyers.com.