How To Take Your Company Public

Going Public through a reverse merger, often with a PIPE (Private Investment in a Public Entity) or IPO is a landmark event. The steps a company and its management team take to prepare for public shell merger will have a significant impact on the success of raising capital in a PIPE offering or IPO process, and the after market for the company’s stock. Our first advice, therefore, is to consider the points here as early as possible in your planning process. Please note the market for IPO is generally limited to the largest and most established private companies; therefore, most pubic offering of less than $100,000,000 are done via private placement PIPE offerings in conjunction with a reverse merger.

 

Comparing Three Ways to Go Public

Traditional Underwriting

Time: 6 to 12 months

Cost: $350,000 to $1,000,000. (The company will be out of pocket at least 50% of this amount prior to completion.)

Capital: Typically raises more capital than other types of transactions.

Problems: Underwriting may be delayed or canceled. Issue price may be changed by market conditions or underwriter.

Reverse Merger or Buy an Existing "Public Shell"

Time: 2 weeks to 60 days

Cost: $300,000 to $800,000

Capital: Does not raise money but stock is now valued and tradable

Problems: Potential "skeletons" in acquired shell. Control shareholders of operating company may receive restricted shares.

Advantages: Typically, reverse merger or public shell merger is the quickest way to get public. Non-control investors may receive registered or trading shares.

Click HERE for more information on Reverse Mergers

Merge with a "Custom Designed" Public Company

Time: 4 to 8 months

Cost: $150,000 to $300,000

Capital: May raise money and stock is now valued and tradable

Problems: None

Advantages: Public company can be "Custom Designed" to the operating companies specifications. Shareholders of operating company receive registered shares. New corporation so no "SKELETONS" in the company. Financial expertise during the transaction. Market support after the transaction. Automatic shareholder base friendly to the "Small Cap" market.

For more information on going public through a reverse merger and details on public shells currently available, please contact Go Public Institute at 281-440-7530