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The IPO is a seductive goal for many entrepreneurs. Billion-dollar market capitalizations, rapidly growing stock option valuations and early retirements to the decks of private yachts are among the many reasons so many companies desperately want to get their shares into the hands of the investors club. But how is it done? How can you take a private business public? Everyone knows there’s a lot of paperwork, but is it really as hard as it sounds? Like most things, shepherding a business from drawing board to the stock exchange is a complex long-term goal. Here are some of the ways entrepreneurs can get their companies from here to there.
A rapidly advancing product or a considerably popular product is usually the first step in the journey towards a public offering. Investors not only want to see sales, they want to see how those sales become eight figure revenues in a short time. It’s not just the product or service, it’s the plan that makes them into household names that counts.
Many companies can have enormous sales and still be experiencing chronic financial problems. Investors get paid out of a company’s profits, so you have to be sure you can demonstrate your company can not only pay its own bills, but pay consistent and growing revenues to its investors.
Everything that is expected to resonate with a large audience and especially anything expected to resonate with their pocketbooks has to have a great story behind it. Like students who are pursuing a master’s in public administration online programs, you have to be able to explain what you know in compelling and simple terms. If you are planning to take a company public, you have to be able to tell that story in a compelling way and do it at the drop of a hat. You never know who might be listening.
Part of your story better be the great numbers your business has put up, is now achieving and will achieve in the future. You might not have world class sales yet, but if you plan on attracting the attention of investors, you need to be able to show them credible evidence your numbers are going to be where they need to be and be there on time.
As much as you might believe otherwise, business ultimately comes down to the people. If you have a roster of all-stars, and those future executives can convey the unique plan your company has for success, you have an excellent chance of getting your company noticed and on the big board. Investors respond to two things: Fear and greed. If you can assuage the first while appealing to the second, you will achieve your goal.
As always, a complex business goal requires expert advice. It is strongly recommended you obtain professional counsel as early in your journey as possible.