There are two major issues facing a start-up considering an IPO: how to do it most effectively, and, secondly, whether to do it at all. The second is the threshold question. Will the issuer be able to raise capital cheaply and more efficiently on the wings of an IPO than with any other method, taking into account the long-range consequences of becoming a public company (going public)?
On the plus side, the culture of venture capital is heavily involved with the proposition that the terms "public company" and "rich entrepreneur" are synonymous. Indeed, the home-run payoffs for celebrated founders are usually identified with a public stock sale. A public market entails (although not for everybody) liquid securities, a classic exit strategy for founders and other shareholders. Moreover, to the extent equity is being raised for corporate purposes, the price of capital obtainable from the public will usually be cheaper because any commodity that can be freely sold is intrinsically more valuable than its illiquid counterpart.
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To read the original article: Whether Or Not To Go Public | The VC Experts' Buzz | VC Experts
