Looking for the right IPO advisory firm? Make sure that you choose a company that you can trust and rely on from start to finish. At LifeSci Advisors, our team always makes sure to go the extra mile to ensure that you are well-taken care of and that we are able to yield the best results possible for your company.
An IPO is a big step for your company – let us help you make sure you get it right!
What Is an IPO?
An IPO is short for initial public offering, and this refers to the very first sale of stock that a company issues to the public. Prior to releasing an IPO, a company is considered a private company. This means it consists of only a relatively small amount of shareholders, and these typically consist of primarily early investors. This might be the founders, their families, and their friends, and possibly some professional investors, such as angel investors or venture capitalists.
The public would refer to anyone else who does not fall into this category, and they are unable to invest in a company until it “goes public” with the release of an IPO. Any individual or institutional investor who was not involved with a company in its early days and is interested in purchasing shares can do so once the IPO is released.
When Is the Right Time?
As we said before, going public is a big step for any company – and it is a decision that should be treated with care. Knowing the right time to go public is essential –you want to make sure that your company is in a good position first and that people will be interested in investing.
A privately held company (one that has not yet released an IPO) holds certain benefits that will be forfeited by going public. One example of this is the fact that owners of private companies are not required to disclose much of their accounting or financial information. Within the US, founding a private company is relatively inexpensive. Most small and medium sized businesses today are private. Large companies, though, can be private too. Some examples of large private businesses include IKEA, Mars Candy, Publix Supermarkets, and Hallmark Cards.
Public companies, on the other hand, consist of thousands of shareholders. As a result, they are subject to stringent regulations and rules. They are required to form of board of directors and must report auditable accounting and financial information each quarter. They also must adhere to the requirements set by the stock exchanges their shares are listed on.
Why Go Public?
As we mentioned, there are certain benefits that come with being a privately-owned company. Being exempt from the requirement to disclose a certain amount of accounting and financial information is a benefit, as it is not needed to adhere to many rules and regulations imposed by the SEC and various stock exchanges. This makes it very enticing for many companies to remain private, as it allows them not to do a large amount of work.
With this in mind, it’s easy to find yourself wondering, “Why even go public at all?” Well, the reason is because doing so comes with a lot of benefits – and in many cases, more benefits than there are drawbacks.
Going public raises a substantial amount of money for your company to expand and grow. While private companies can raise capital through private investors, borrowing, or being acquired by another company, IPO is an option reserved for public companies that raises by far the greatest amounts of money for a company and its early investors.
A lot of opportunities are presented to companies once they are being publicly traded. Due to the increased scrutiny placed on them from investors and analysts, companies typically reap the benefits of lower interest rates when issuing debt. In addition, as long as there is demand in the market, public companies are able to issue more stock in what is referred to as a “secondary offering.” With this, acquisitions and mergers are easier to arrange with stock able to be issued as part of the agreement.
In the eyes of investors, trading in open markets equals liquidity. Shareholders of private companies have a very hard time selling their shares, or even simply valuing them. Public companies enjoy trades on a stock market featuring buyers and sellers with known data and prices. This makes things much more straightforward and simple!
As you can see, going public and releasing an IPO has a lot of benefits – but also a few drawbacks. Whether or not it is worth it for your company to release an IPO depends on your unique situation. With the stock market being such an unpredictable terrain, and with how many factors need to be considered regarding your company, its standing with the public, and so much more – it’s best to have someone on your side to help you through the entire process of deciding if you want to release an IPO (and then eventually releasing it). At LifeSci Advisors, we are experts in the stock market and have information based on years in the industry to help you gauge your situation and decide on the best course of action for both you and your company!
Here at LifeSci Advisors, we can offer you help, guidance, and information from beginning to end. To the early stages of deciding whether or not an IPO is the best option for you, to managing the process of releasing it, to evaluating the results of your decision, we are here to help your company play its cards right every step along the way!
Ready To Explore IPO Advisory Services?
Are you ready to explore releasing an IPO as an option for your company? Let us at LifeSci Advisors guide you through the process to yield the best results through our IPO advisory! Get in touch today with any questions you have about our IPO advisory services and to take the first step towards becoming a public company with a stellar reputation in the stock market!