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I am interested in taking my company public. How would I go about doing this?

By: Rick Gossett

 

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I am interested in taking my company public. How would I go about doing this?

Answer:   The comments that we offer on legal topics are not based on any legal qualifications and should not be considered as anything other than general feedback. Our ability to find information that is directly responsive to legal and regulatory questions is limited to referencing documents published by the government or other sources.

Generally speaking, going public requires a lawyer, CPA, and investment banker. We do not know the current sales volumes and profitability, how long you have been in business, the growth potential of your business, or  other details of your business; however, becoming a public company is not an overnight process and requires time (sometimes years) to prepare. Going public refers to a private company’s initial public offering (IPO), thus becoming a publicly traded and owned entity with stock trading on a public exchange(s). You can begin your research of going public through the following example government and business resources, which include these basic steps:

1. Start planning two to three years in advance.
2. Ensure your product is beyond the prototype phase before you proceed.
3. Network: Get to know other entrepreneurs in your community and your industry who know the lawyers, accountants and investment bankers you should and shouldn’t meet.
4. Develop a solid business plan.
5. Clean up your books and your team. If you have financial problems, solve them. If some of the company founders and other execs are no longer working out, buy them out.
6. Form a corporation.
7. Hire a public relations adviser. Start getting the word out about your company so that when the IPO hits, investors know who you are.
8. Start preparing financial statements on par with those you will have to file after the IPO. This will help you start thinking and acting like a public company.
9. Raise private funds. If a respected venture-capital firm invests in your company, the endorsement might help in the subsequent IPO. The VC firm also will help you with management problems and help you stage the IPO.
10. Pick the team that will get you through the IPO: accountant, lawyer and investment banker.
11. Prepare a registration statement: First, you’ll have to conduct an audit, hire a printer, and ask the Securities and Exchange Commission to approve the statement.

Published: August 9, 2013
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Rick Gossett

As COO of Tarkenton Companies for more than 20 years, Rick has been responsible for business software development, unique partnerships, business educational content and consulting, and more. Rick was the originator of Tarkenton Companies’s consulting service and initially handled all of the questions himself. Prior to joining Tarkenton Companies, Rick owned and operated a private practice as a CPA. Prior to that, he was a Senior Manager at Pannell Kerr Forster in tax and audit, as well as Principal in Ernst & Young's small business advisory group.

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