T-Net British Columbia: Home

Member Login | Employer Login 

Entrepreneurs Investors Tech Financing Clinic T-Net Financial Network






   

 


      

Benefits and Opportunities

Capital to Sustain Growth - Perhaps the greatest benefit is the net proceeds from a public offering. The proceeds, also known as equity or capital, is unique in that it does not have to be repaid. This capital can be used to grow your business and to execute your business plan. You can use this money to repay debts, carry out research and development, modernize your facilities, and use it for working capital.

Increased Prestige & Creditability - Being a public company immediately increases the shareholders and the Company's image and reputation. Owners often comment to us after going public, that they find that they have much more creditability. Others have said that they have found it easier to expand their businesses regionally / nationally partly due to the increased visibility and public awareness that accompanies the IPO.

Exit Strategy for Shareholders - As a public company, the shareholders of the Company can sell some of their shares thereby providing an exit strategy or liquidity for them. Of course there are certain regulatory restrictions and market limitations that must be allowed for.

 Merger & Acquisition Strategies - Companies traditionally grow internally. To speed growth and success, companies often adopt a merger & acquisition strategy. Unfortunately, most private companies often lack the resources to carry out such a strategy. As a public company, you have a significant opportunity to implement such a strategy. Using a combination of cash and your publicly traded stock as currency you now have the resources to acquire other companies. This will allow you to immediately diversify your product lines, acquire complimentary or better technologies, increase your market shares, acquire established marketing channels and management talent, and possibly eliminate a competitor.

Increased Market Value - Publicly listed companies tend to attract a much higher value than comparable private companies. The main reasons are (1) investors are more willing to pay more for a stock that is marketable (liquid); (2) public companies tend to be more mature and sophisticated and (3) information about public companies is easily accessible. Public companies must publish their results and inform the public of any material changes on a timely basis.

Incentives for Key Employees - You have an exciting company or technology with potential for significant success, using stock options to attract and keep the best people to help you execute your business plan is important and a valuable incentive available to public companies.

 Easier Access to the Capital Markets - Public companies have an easier time accessing additional capital assuming they achieved their milestones and their stock performs well in the aftermarket.

Less Dilution - Often public companies enjoy higher valuations than private companies and as a result suffer less dilution when shares have to be sold to raise capital.

" R&D Funding
" Angel Financing
" Venture Capital
" Debt Financing
" Subordinated Debt
" Going Public



Back Go to top of page

 

Welcome Articles Links FAQ Expert Bio Email The Expert