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Article by Craig V. Butler, Esq. |
This article is the first in a series of two articles that will analyze the financial costs to be a public company, and the financing opportunities that public companies have over private companies. The impetus for both articles is the simple fact that the primary reason many private companies are considering going public in the current marketplace is access to financing. In order to properly make this decision companies should know both the cost of getting and being a public company, as well as the typical financing options that might be available to them. As these articles will discuss, while there are several financing sources available to public companies that are not available to private companies, each company needs to determine total "cost" of this financing, including the costs of being a public company, in order to determine if being a public company is the proper direction the company should take at this time. The first article looks at financing opportunities available to public companies that are not usually available to private companies. The second article, due to be published in the August 2010 edition of The Isolated Offering, will take a look at the costs that it takes for a private company to go public and then the cost of being an existing public company, so those companies determine if the possible financing options are worth the price of being a public company. It should be noted that these articles are not meant to encourage private companies to go public merely for the financing opportunities, nor is it meant to discourage companies wanting to go public (or those that are public to go private) due to the costs involved in being a public company, but are merely meant to inform companies in those situations to determine if becoming or staying a public company is worth the cost of being a public company.
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