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What does it mean to ‘go public’ with your company?

by | Oct 28, 2016 | Sales & Dissolutions

Going public is a phrase that is associated with offering shares of your company to the public for the first time. When you go public, stock in your company can be traded on the stock exchange, and it can mean an increased source of capital for your business. Going public also means a lot more regulation, particularly with regard to specific financial and business management issues.

The technical term for going public — or offering shares of your company to the public for the first time — is “initial public offering.” It’s abbreviated as IPO.

Many people see an IPO as a sign of success. If people are willing to invest in your company in the public arena, then you must have built something of value that people can support and trust. An IPO can also be a step in growth, though you don’t have to be public to become a large company. Both Domino’s Pizza and IKEA are still privately owned, for example.

While IPOs come with many benefits, they also mean you have to do a lot more reporting and be a lot more transparent with your books and business. It also means you could find yourself in very hot water if you make mistakes with regard to regulatory compliance.

IPOs can also be complex, and it’s important to protect yourself and your company diligently. In exchange for the money and prestige of going public, you give up a substantial amount of control in something you might have built from the ground up. Working with an experienced lawyer can help you maintain some control and protect your interests through the process.

Source: Investopedia, “IPO Basics: What Is An IPO?,” accessed Oct. 28, 2016

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