Exit Signs: 4 Things You Need to Know Before Going Public
Are you and your company truly ready and prepared to go public? Here're 4 things you should take note of before getting listed.
Author: DBS BusinessClass, Administrator of DBS
Varsity Books was a college student's dream – an online bookstore selling textbooks with subsidized shipping. In an industry which founder Eric Kuhn termed as "the old guard", the company was so hugely successful that they went public after less than two years of their founding.
But that's where things went downhill. Shortly after going public, Varsity Books was delisted from the NASDAQ. Even though they were later relisted and bought over, the lesson to learn from them here is simple: going public is not for everyone.
An IPO has obvious advantages, with the most common reason being increased access to capital and a reduction in personal financing. But it also means surrendering some control over your company and opening the business up to public scrutiny.
Before you read on, ask yourself - are you and your startup truly ready and prepared to be listed?
If your answer to that is a resounding ‘YES!', congratulations - You've just taken the first step towards one of the most significant events in your company's life.
Here are some things you should take note of:
1. Start early
The IPO process can require a lot of time and money on the part of the company so it's advisable to start at least a year in advance. Ensuring that you dedicate sufficient resources to this endeavor will make the transition from a private to public company smoother.
2. Understand the Singapore Exchange
(or whichever stock exchange you want to list your company)
There are two methods to listing on the SGX, mainboard and catalist. Decide on the method that best suits your company, and start looking through the listing process. This will set a clearer direction for your team as your decide on the necessary steps to take.
3. Get the right professional advisors
The path to going public and getting listed will require you to seek advice from professionals such as lawyers, auditors, lead managers and PR firms.
4. Be prepared to transform your company
Going public is a huge milestone in your company's life, but it is just one step in a much greater journey. Your team must continue to constantly re-evaluate your business and be prepared to make changes which may transform the entire business model – if the situation calls for it.
‘Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning'. – Winston Churchill
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