Why Go Public?
Most business owners want their company to grow and expand. They want to earn more revenue, have a national or even international presence. However, expansion and growth require investment and capital and that’s not easy to find. That’s why we at Aspen Asset Management recommend ‘going public’.
The definition of "going public" is the process of registering a company's shares of stock with the Securities and Exchange Commission and offering the stock for sale to the public.; otherwise known as an initial public offering (IPO).
Going public has become an appealing proposition for most emerging companies due to the advantages it contains. Some of the advantages may include liquidity, access to the public equity markets, and prestige. Here’s a brief explanation of why going public can be beneficial for you:
- Cash - Most companies go public because they want cash to achieve their goals and grow. For example, if you’re a company based in California and want to establish new corporate offices in New York and Washington to start a national business, you need capital. While you could seek out private investors, going public would give you more capital to invest.
- Liquidity - Stocks are liquid assets so they can be sold to gain cash if required. This can be a boon when you don’t have enough money for critical expenses and bills. You can then repurchase them when your company finances are stable. Liquidity is always an asset because it gives your company a cushion to fall back on.
Going public can also add credibility to your reputation. Public companies are answerable to people who own their shares. These people are represented in the board that monitors the operations and growth of the business. Public companies need to follow strict federal guidelines and laws; so going public is considered an accomplishment.
Click here to discover the advantages and disadvantages of going public.