13: Public ownership

• A potential goal for selected businesses
• It is a long road
• The Sarbanes-Oxley Act of 2002
• What does it take to go public?
• A track record
• A history of earnings growth
• A strong potential for future growth
• A sustainable market for your product or service
• Strength in governance and accounting
• A highly qualified management team
• A clearly stated growth program
• Advantages of public ownership
• Access capital
• Higher valuation of the company
• A higher company profile
• Use stock as currency to acquire other companies
• You are a more attractive suitor for potential acquisitions
• Establish a public valuation of your company
• Provide liquidity for the owners
• Stock options provide incentives for key employees
• Facilitate exit strategy
• Disadvantages of public ownership
• Your books are open to scrutiny
• Higher accounting costs
• Majority of independent directors
• Ownership valuation subject to market fluctuation
• You will lose some flexibility in operating your business
• Going public
• The initial public (IPO)
• Hiring the going-public team
• Audited financial statements
• Registration statement and prospectus
• Appoint independent board members
• Appoint investment banker
• Create an audit committee
• Appoint an independent board of directors
• Resources
• "Roadmap for an IPO, A guide to going public"
• Top ten do's and don'ts
• Session Quiz