Why Go Public?Written by William Cate
Why Go Public? By William Cate Published September 1999 [http://home.earthlink.net/~beowulfinvestments/] Or, visit Global Village Investment Club Website: [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/] It costs money. It takes time. If you try to do an IPO, your odds of completing it are about even. If you do average IPO on OTCBB, your million dollar costs will exceed money you can raise. If you go public you have to battle market manipulations. You must avoid Vulture Capitalists that will destroy you. Public company survival risks can be greater than for a private company. If your company is a stock scam, you run risk of facing criminal charges. The downside to being a public company appears to argue against taking public path. There are three primary reasons that require you to take your company public: 1. Without liquidity, investors won't risk their money on your company. If they can't sell stock, they won't invest in your company. The ONLY way to offer investors ability to sell your stock is to take your company public. 2. Stock is money. You can use your strong share price to acquire cash-producing assets for your company. This means you can grow a hundred million dollar company in less than five years rather than more than twenty years. 3. When you sell, you'll get twenty times more money for your public company than you would for your private company. Public companies sell at Market Capitalization. This is share price times issued shares. Private companies sell for between 80% and 150% of their pretax profit. Crunch numbers and you will ALWAYS get a bigger "Golden Parachute" owning a public company.
| | Is Your Company Ready To Go Public?Written by William Cate
Is Your Company Ready to Go Public? By William Cate Published November 1998 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]You're not ready, unless you can afford to go public. Do you have money? If you don't have money, where do you expect to find it? You should budget about $1.25 million to do an IPO (Initial Public Offering). You can buy an OTCBB Trading shell with 90% control for $450,000. You should add another $250,000 to cover your SEC S-4 Filing costs and your "Due Diligence" evaluation of shell. You'll need a way to do your Private Placement financing once your S-4 gets by U. S. Securities and Exchange Commission (SEC). You can do a spinoff. It costs $250,000. I arrange an Offshore Private Placement financing for my spinoffs. If you can't pay to go public, you aren't ready to go public. Until your company is making money, you aren't ready to go public. Cash flow is credibility. If your company lacks credibility, it's hard to find investors and shareholders. Stock hype is a dangerous way to try to build your startup company.
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