editor’s note: the author of this article is MaheshVellanki.
2015 IPO surprisingly little. Shopify, Etsy and GoDaddy are very difficult to go on the way to the listing of these minorities. After a period of time to prepare for the listing of the company is also relatively small.
it is well known that the company is now getting more and more private, and revel in the stage of getting multiple rounds of huge financing and "quasi IPO" (the word from the Silicon Valley venture capital AndreessenHorowitz). Because there are too many advantages to maintain privatization, some companies are still thinking about the significance of the listing. However, many of the benefits of listing are ignored – let’s look at the five most important points of the IPO.
Key advantages of
liquidity enhancement – the company employees and other key shareholders, such as the establishment of the company has made great efforts, IPO can create wealth for these people. Listed companies to improve the stock market liquidity, so that shareholders can be realized.
employee incentives – equity compensation can be used to attract, encourage and retain key employees. Stock option is a risky business for most startups, especially if the company is not successful or the liquidity is low. Shares of listed companies may not have more investment opportunities Private Companies, but it is easy to sell in the stock market.
access to Funds – IPO stock market price discovery function. There is a public acceptance of the stock valuation, the company’s acquisition. Subscribe for shares of listed companies such as Twitter, the prospect is much clearer than the privatization of start-up companies. Those companies may always lack liquidity, future valuations are uncertain.
better look at the balance sheet – public offering of shares can inject a lot of money for the company. The public market investors much more than the private market, so the company can raise more than in the private capital market (though the gap is narrowing, recently) but also easier to get through the next IPO to raise funds.
brand marketing – the success of IPO is an excellent brand marketing for the company. Listing can bring the media hype, improve the company’s social awareness and credibility. Companies can develop business through a variety of ways during the listing.
so, what to pay for the listing?
a company finally decided to go on the market, then what to do?. Here are four key stages of the company’s listing.
time: IPO months to years before.
prepare financial reports.
finalize the core members of the management team.
determines the composition of the board of directors.