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The pros and cons to consider before taking your company public

Business is good, but it could definitely be much better. You have some great ideas. The problem is that putting anything major into actions costs a lot of money. You've done the math, and you know that your best bet is getting some outside investors. Now you have a big decision to make. Should you ke the company public or stick to private investors? There are many rationalizations for either choice, so you will want to consider carefully. This is an overview of the pros and cons of going public.

Pros:

More money

A successful IPO will generate more revenue for your company than any other option. You can implement your long-term plans, and you may even do well enough for some business acquisitions that open entire worlds to your potential. There's no other way to put it. Going public has the highest potential to increase your liquid assets.

Stock value

Besides an inflow of cash, your stock can become a form of secondary currency. From paying employees to financing expansions, this additional money makes it easier to expand, keep your people happy and push forward without draining the coffers.

Perception

There's a certain perception of legitimacy that comes from going public. Most of the worldwide companies that you look to as an example are probably public at this point. While the change doesn't objectively make your business better, the common perception will make it easier to forge new partnerships, convert acquisitions and do more business with more people in general. This is an unquantifiable value of going public.

Cons:

Control

This is the big one for most business owners. When you go public, you relinquish a certain amount of control of your decision-making. Most stockholders are really only interested in the bottom line, so they may push your business towards short-term gains. One of the biggest advantages of staying private is that you can choose your investors and only make offers to parties who will have the company's best interests in mind.

Cost

As much as going public can get you money, there's a large startup cost before you get there. Many small business owners underestimate this cost and commit before they are ready. For this reason alone, you should get a legal consultation before you fully decide to go public.

Risk

Not all IPOs are successful. When you consider the large investment you have to make just to take this chance, you want to be very confident that your stock will sell before take the plunge. Thankfully, there are legal professionals who you can consult with to help you assess the risk, enabling you to make the best choice.

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