Bringing Your Private Company to IPO – Conclusion
- Jan 29, 2014
- Marc Fogarty
This series has examined many steps on the path to bringing a private company to an IPO. We considered the many motivating factors for a private company to want to go public and how to plan a company’s growth to support the added physical labor and costs related to the rigorous reporting requirements of a public company. We also reviewed the financing options for private companies and how those decisions could later impact an owner’s options when deciding to go public.
Perhaps most importantly, we have provided a candid discussion of how an owner should prepare for the challenges both mentally and physically. Being “forewarned is forearmed.” One must consider the emotional drain of being in the public eye and the time it takes away from an owner who may be used to “running the business.” Even if an owner is mentally prepared, they need to make sure their business can take on the operational challenges and responsibilities. Either additional staff or third party resources will need to be contracted in order to achieve the physical requirements of being a public company, such as reporting, auditing of financial statements and conducting ongoing risk assessments.
As part of this series, we've looked at cases of some well-known brands that have decided to go from a public company back to a private company, and what might motivate that decision. It can be costly and is not a decision to be taken lightly.
In conclusion, being a public company has its challenges and its rewards. Companies need to be cognizant of what those benefits, risks and added responsibilities are, and decide whether the decision and the timing are right for their business. Life will be different as a public company – that doesn’t mean different in a bad way or a good way, just different. Some people like the hustle and bustle of being part of that elite group of public companies and some don’t. Educating yourself now on where the road leads and what you may encounter on your journey will help you plan the right direction and enjoy the ride.
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Marc Fogarty, Audit Partner and National Biotech Sector Leader, within Technology and Life Sciences Group, and member of the firm's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.
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