The IPO process will take enormous amounts of time, distract attention from running the business, possibly create conflicts, disclose company information publicly, and cost money. For a management team going through a first-time IPO, the learning curve is high. A company must be diligent, even zealous, about its commitment to the IPO process.
How Big Should a Company Be to Go Public
A company should go public when it qualifies under one of the listing standards and meets other qualifications for initial listing of operating company shares on a stock exchange, and its SEC registration statement is effective. A company should have significant growth potential to achieve an acceptable valuation for IPO pricing and make the investment attractive to future investors.
Advantages and Disadvantages Of Going Public
This article discusses the advantages and disadvantages of going public through an IPO from the company’s standpoint. It also addresses implications for the stakeholders, including venture capital or private equity firms and the IPO company’s management team, Board of Directors, and employees.