Guide to Going Public
Pros and cons of going public
Outperforming companies weigh the benefits of
going public against the drawbacks, as well as
against the company's and shareholders' objectives.
Pros
Efficient access to capital markets to raise money through
equity and bond offerings with better future financing
opportunities
Flexibility to trade shares with high liquidity and daily
valuation
Shares functioning as new liquid M&A currency
Greater attention, better brand recognition and prestige
with customers and suppliers
▸ Ability to benchmark operations against other public
companies within the same industry
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Potential to diversify wealth on shareholder side
Enhanced ability to attract, retain and reward valued
employees as listed company
Opportunity to bond and incentivize key people with long-
term incentive plans
Cons
► Holding a lower stake in the company
▸ Distraction from management of business
► More requirements on transparency and disclosure
The demands of periodic reporting
Initial IPO expenses and recurring costs to maintain the
listing status
New investors with voting rights
Pressure to deliver on your promises and the burden of
dealing with shareholders' expectations
▸ Higher corporate governance standard requirements
Increased and ongoing regulatory scrutiny and supervision
7| Guide to going public
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