IPO

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Initial Public Offerings are not exit vehicles for owner/managers. An IPO requires a fully staffed management team that can withstand the scrutiny of Wall Street analysts.  Additionally, the cost of compliance with Sarbanes-Oxley is prohibitive for most private companies. 

• Enables the Company’s shareholders to retain equity.
• Some liquidity available for majority shareholders.
• Add-on acquisitions could be funded largely with “new currency” (public stock).

•  Requires a minimum market capitalization of $200 million to have an active float with institutional following and investment.
• Substantial, upfront marketing/preparation costs ($500,000 or more).
• Not an exit strategy - financially or personally.
• Requires complete management infrastructure with public company experience.
• Sarbanes-Oxley compliance ($400,000 to $500,000)