Benefits: Owners and Investors

Public Companies are Generally Worth more than Privately Held Companies. In many cases, the difference is quite substantial. When you take your company public, you will see an almost immediate increase in value to you, as the owner.

Some of the benefits for Owners and Investors are:

Liquidity. Having public stock provides liquidity for you and your investors. If you are currently a privately held company, your private stock is not as liquid as it would be if it were publicly held stock. You have the ability to create an entire new market for your stock when you take your company public and it may also help the company borrow more easily. The liquidity will also benefit your investor’s investment and may make your company worth more to them. It can also mean that they will be able to form an exit strategy, or diversify their current portfolios.

Trade Stock. Going public means that your investors will be able to buy, trade or sell your company’s stock much more easily. (The initial stock that they receive will have a one-year hold).

Instant Stock Quotes Investors will be able to instantly get a stock quote either on the Internet or through their broker.

Employees Also Benefit. Taking your company public can result in financial rewards and independence for not only the owners and investors, but the employees who can also be stockholders.

Estate Planning. If you have family members that are counting on you to provide for them in the future, the stock in your publicly traded company can be used as a part of your strategy for retirement. You can use these assets to allow your family the financial freedom they may need when you are no longer with them.

Stable Stock Price. The limited amount of available public stock that will be out in the marketplace (and the 1 year hold) will produce a strong and stable trading price

Prestige. If you are worried about the appearance of your company, or its overall public appeal, when you take your company public, it can provide an air of not only legitimacy, but also stability. Public perception of your company is key in having the resources and abilities to expand your company. The prestige of your company will also reflect on you as the owner. Typically, founders, co-founders and managers of public companies are regarded as having a level of prestige.