Going Public or Completing a Reverse, Positive Stocks

March 23, 2011 - PRLog -- The steps a company and its management team take to prepare for public shell merger will have a significant impact on the success of raising capital in a PIPE offering or IPO process, and the after market for the company’s stock. Our first advice, therefore, is to consider the points below as early as possible in your planning process. Please note the market for IPO is generally limited the largest and most established private companies; therefore, most pubic offering of less than $100,000,000 are done via private placement PIPE offerings in conjunction with a reverse merger.

1. Have a compelling and convincing reason to go public.
There are many obvious benefits to be derived from going public. Going public by (IPO)or doing a simultaneous PIPE with a reverse merger enables the company to raise a large amount of cash in a single transaction, enhances the company’s net worth, provides access to future capital, and creates a “second currency” consisting of liquid tradable stock. An equally important consideration is the opportunity of being public provides for early-stage investors – primarily angels and venture capitalists – to exit from their investment. Lastly, the company can include publicly traded shares or stock options as part of its compensation package for recruiting and retaining key personnel.http://www.positivestocks.com

Please note when doing a reverse merger, having a quality public shell and structuring the transaction properly is like the foundation in building a home. Go Public Institute has all most 40 years in assisting companies in going public and providing high quality public shells.

2. Know the market valuation for similar public companies
In PIPE or IPO offering of common stock, a privately owned company sells a portion of its ownership interests to the general public (usually constituting retail and institutional investors).Management should identify public companies similar in size, industry and development to get an idea of expected pre funding market valuation. In general, a “stronger” company – one with established products, viable technology or proven management – is in a better position than a company lacking these advantages and will usually give up a smaller percentage of ownership than the “weaker” company must in order to raise the same amount of capital. In some instances, the valuation of the stock may be so punitive that in order to raise the amount of cash a company seeks, the percentage of equity issued to investors may transfer control of the company from the original owners.http://www.positivestocks.com

Go Public Institute has over 35 years of experience in dealing with small public companies and taking the public. While our primary focus to provide a quality public shell for a reverse merger or going public transaction we all always available to share our experiences and suggestions.

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