Raising Capital Using a Public Company

Going public in this manner is ideal for companies that might not be large enough to an insurance company for an IPO and those that do not need to pull to pull . Immediate capital They want to go public because of the many advantages that being a public company offers such as increased valuation, using public stock as currency to other businesses and assets , liquidity , prestige gain and to reduce the need for costly venture capital and other financing sources reduce . It also makes it easier to raise capital because once you become public it gives you credibility and a benchmark rate to march against capital.

Public companies are typically valued higher than their private counterparts . So , what many advanced CEOs and CFOs do is go public without simultaneously raising capital and thus a higher valuation and benchmark stock trading price . Then , as a public company , they do a private placement with a big discount on the market with the provision that the investors the stock for 1 year . That is why investors get the discount price of the open trading market .

As an example , a company goes public without initially raising capital and begins trading on the open market at U.S. $ 10.00 per share . An individual can go on the internet or run in a listed company to buy stock at $ 10.00 per share . Often sell public companies in this situation stock in a private placement at a very significant discount on the open market price ( in this example , perhaps $ 5.00 per share ) . Accept the investors to keep for a period of time the stock. ( Issuers may sell the stock themselves or have small broker / dealers to help them. ) Since investors can buy at a big discount on the open market price they give them a decent incentive to invest the shares. Making it easier to raise capital.

This is very valuable and very useful tool when raising capital . It can help to reread the above example to understand how it makes it easier for you to raise capital. Completely in some The president of our company is an experienced securities attorney .

We help companies to an IPO on the NASDAQ , the NASD OTCBB ( National Association of Securities Dealers Over the Counter Bulletin Board ) or NQB (National Quotations - Pink Sheets ) .

In fact, if a company is interested in Going Public they may want to start trading on the Pink Sheets . There are NO audits , NO periodic SEC reports and they do not have to deal with Sarbanes Oxley . It is also very fast and relatively inexpensive. A company may initially begin trading on the Pink Sheets or they want quickly become public and , if they wish , can later easily trade on the OTCBB .