PostHeaderIcon Some Information That Help You To Understand Can A Small Business Go Public?


I noticed that it is a common belief in the small business community that small businesses can't go public until they have important revenues, say something on the order of $10 to $20 million per year.

This is completely wrong.

I have been taking Small Businesses and Introduced companies public as a consultant above 15 years now. And for 15 years I have been repeatedly asked in different ways " Can a small business akin to ours raise capital by going public? We simply have a million dollars in revenue. Aren't we very small?"

The reply has been and still is "Of course, you can go public. And no, you are not very small."

What is very small?

Well in fact nothing. An organization who is bringing in one million in revenues would be no problem to take public. But it is truly not regarding your revenues, it is regarding your business ideas. If you are working on a development stage business plan and you are achieving success, then we can possibly take you public with that alone. If you are making five, ten or twenty thousand a month that is beneficial because it just signifies that you are implementing on your business plan.

It has become tougher and tougher to take an organization public with no revenue and no business plans since the SEC and FINRA are rightfully trying to eradicate micro cap scam, but yes it can still be accomplished. If you have no revenues, although, you will need to have patience, some money in the bank to warranty you can live for some years, and you will have to be making genuine progress on your business plan to show the powers that be that you are a "genuine" company and not simply a "sham" set up for micro-cap fraud.

If you are a small business and you don't think to be mom-and-pop always, then "Going Public" is something you must investigate in the quite early stages. "Public" money is generally a lot cheaper as compared to "private" money.

I have noticed private companies who feel they are too small to "go public" give up half of their company for a small six figure investment. At times companies with revenues in the millions feel they are very small and taking the business capital route they increase ten or twenty million but finish with merely five to six percent of the company in a few years.

This type of dilution is completely unnecessary. The similar amount of money can be increased by going public while sustaining 60-65% ownership

Obviously there are drawbacks to going public early too, but many of those have to do with being preyed upon by non-professionals, swindlers, and others who really don't know what they are doing. If you look into your advisers and get suggestion and structuring and referrals from experts who know what they are doing, you can reduce many problems of going public early.

And if you feel you are possibly the next EBay or Google or Microsoft kind of company, going public early on without venture capitalist could be worth billions and billions of dollars.

Bill Gates just owns almost fourteen percent of Microsoft. Imagine how rich he would be if he owned sixty percent!

Now after the "Can I truly go public?" sort of queries the next set of questions I generally get are "How do I raise capital when I go public? Do I do a merger reverse? " or " I see ads that say - Purchase reverse merger shell - must I do that? " But those are questions for another article. Stay Tuned.

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