As enterprises contemplate going public, the number one reason is to raise capital.
A necessary outlook of the many ways private companies can join the public markets, and what is the relevant securities law, is in order. The need to consider choices clearly is of great importance.
These are many of the plusses of entering the public markets:
• The choices of capital formation will multiply, because you can now approach many outside investors.
• Investors – as well as company insiders – have an exit strategy to sell their shares and recoup their initial investment.
• Raising capital is easier, and if investment attention about your company increases, it could sustain a secondary trading market for your stock.
• By issuing stock options your public company can attract and keep qualified management.