Why Go Public?
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WHY TAKE YOUR COMPANY PUBLIC ON A STOCK EXCHANGE?
A growing company needs access to both working capital and expansion capital. Whether it is bank loans, subordinated debt, seed capital, venture capital, or investment financing — that access to capital must be realistic and achievable. Without it, even the most “self-funding” business will fail to reach its full potential.
If you’re looking to take your company public on a stock exchange, find out why first. This page describes the benefits of a stock exchange listing for you and your shareholders. What makes the decision to become a publicly traded company the right one over other means of financing a business?
Going public may be part of a long-term strategy for a growing organization that requires access to larger capital markets. Alternatively, you may be an entrepreneur with a promising business founded on an excellent idea. You’ve already built some shareholder value and are looking for leverage to get to the next step. Most founders exhaust their borrowing capacity quickly when financing a demanding start-up. The public equity markets offer access to untold numbers of new investors — and the capital your company needs.
Many founders have built successful companies without going public. But as part of an exit strategy or succession plan, listing on a recognized stock exchange often makes perfect sense.
WHAT ARE THE BENEFITS OF TAKING YOUR COMPANY PUBLIC?
A stock exchange listing offers strategic advantages, including:
While you should always consider alternative sources of capital, a well-built strategic business plan should include the benefits of accessing Canada’s public markets.
WHAT’S IN IT FOR YOUR SHAREHOLDERS?
To determine the share price of your company, there are several factors to consider:
- The market’s perception of your management team and their business acumen.
- Your business track record.
- Your business momentum and an estimation of your continuing potential.
- The size and long-term prospects for the market you are selling into.
Since people invest for the purpose of realizing growth and returns that are better than other investment opportunities, you and your management team are responsible for consistently building shareholder value through profitable corporate growth.
GOING PUBLIC IS EASIER THAN YOU THINK…
Before deciding to go public, you should assess the impact it will have on you and your company. Then decide whether you are ready to make the necessary commitment before, during, and after the initial public offering process. The good news is that access to the public capital markets may be much easier than you think.
After you become a public company, investors and securities regulators will expect timely and relevant information about your business and its prospects. As a public company, you must provide information to the public that may be sensitive. This includes operating results for business segments, compensation of officers, and other material facts.
Depending on where you list, a stock exchange listing need not be a daunting task. However, the steps must be well planned. The typical process includes:
- Developing a strategy
- Planning and coordinating the process
- Preparing, finalizing, and executing the prospectus – if necessary
- Identifying a suitable RTO (Reverse Takeover) vehicle – if necessary
- Completing the transaction and continuing as a public company
If you are looking at taking your company public and would like to learn more about how and why, please contact us. You can fill out the form to the right of this page and a member of our team will contact you shortly.