Quick Answer: Is It Good For A Company To Go Public?

Advantages of IPOs

The primary benefit of going public via an IPO is the ability to raise capital quickly by reaching a large number of investors.

A company can then use that cash to further the business, be it in the form of research, infrastructure, or expansion.

Is going public good for a company?

Going public has considerable benefits: A value for securities can be established. Increased access to capital-raising opportunities (both public and private financings) and expansion of investor base. Liquidity for investors is enhanced since securities can be traded through a public market.

Why would a company want to go public?

The main reason companies decide to go public, however, is to raise money – a lot of money – and spread the risk of ownership among a large group of shareholders. One of the biggest advantages for a company to have its shares publicly traded is having their stock listed on a stock exchange.

What are the disadvantages of a company going public?

  • The Process Can Be Expensive. Going public is an expensive, time-consuming process.
  • Pay Attention to Equity Dilution.
  • Loss of Management Control.
  • Increased Regulatory Oversight.
  • Enhanced Reporting Requirements.
  • Increased Liability is Possible.

How much does a company have to be worth to go public?

For public investors, the rule of thumb for scale is around $100 million in revenue. There are exceptions of course; this number is more of a desired threshold than a clear line. It gives investors a sense of comfort around the number of years it’ll take for the company to actually attain $1 billion in revenue.