Initial Public Offering
One of the best ways for companies to raise additional funding and provide liquidity of their shares is to go public.
Thus, this process is called an Initial Public Offering (IPO), in which a previously unlisted company sells new or existing shares and offers them to the public (institutional and retail investors) for the first time, otherwise known as “going public”.
prior to an ipo
A company is considered private, with a smaller number of shareholders I.e., founders, management, and early investors such as angel investors, VC, and PE funds.
The liquidity of shares is low, and any sale must be done on an individual basis with complicated legal procedures.
after an ipo
The issuing company becomes a publicly-listed company on a stock exchange.
This means that additional capital can be raised more easily, and the shares are traded on the public market.
Benefits & Challenges of going public
Benefits
- Raising larger sums of funding (from institutional investors) – and additional rounds
- Shares can be more easily traded (increased liquidity)
- Established company value
- Easier stock option plan reward scheme
- Better corporate governance
- Better perception of the company
Challenges
- It’s a complicated procedure
- The cost of issuing shares, and compliance
- Performance pressure (managing quarterly reports)
- Partial loss of control and privacy
We provide assistance
Equito provides comprehensive assistance to companies seeking to go public (pre- and post-IPO).
From preparing the financial, legal, and other documentation for the company’s IPO to preparing management to run a publicly-traded company in terms of compliance and communications.
The services we provide
- IPO readiness assessment
- Preparation of all the legal, financial and other documents for the IPO
- Preparation of the IPO prospectus
- Assistance with the due diligence process
- Meeting financial reporting standards
- Corporate structuring
- Establishing corporate governance
