Taking Your Company Public

Raising money via the capital markets offersrewards as well as risks. Here's what to considerbefore making such a move.

your prospectus and SEC filings under an electron microscope. “I’m not saying any second- or third-tier auditing or accounting firm isn’t going to do as well as the Big Six auditing giants, but there’s certainly a higher level of comfort when their name appears on the documentation,” says an expert who shied from giving his name.

At the same time you might consider using public relations help or tapping someone in house to act as a spokesperson. Getting the word out on the fine job you’re doing and the way your product is changing lives helps get the investment community curious about your future and eager to know more. It’s also a good preparation for the types of relations you’ll have with investors and the media alike once you’re public, skills that can either keep a stock afloat months after an offering or keep it from being banished to the scrap heap.

MARKET SUPPORT
Should you choose offer shares on any of the major stock exchanges you’re going to have to enlist the aid of an underwriter, a banking partner that will not only stump far and wide to pique investment interest in your offering, but will act as a prime source of investor information long after the offering is done. The Merrill Lynchs and the Goldman Sachs of the world provide equity research that institutional and individual investors rely on in making market decisions. A good underwriter is also going to help you face and win over the kind of trig investors who’ll hound you during a roadshow–your tour around the country selling your offering. An example, LeCour recalls, was when Air Florida a few years back faced a battery of picayune questions from the investment community, all the way down to how much the airline planned to pay on in-flight meals. “It was the kind of messy moment that makes a company glad to know there’s someone there to cover their back,” he says.

Having been through the process before, your underwriter will also provide invaluable help in pricing shares and gauging just how warmly the market plans to welcome you aboard. “The best underwriters have the horse no matter how soft the mark deals done when others might not,” says Sylvester.

THE PAPER TRAIL
Registration with the SEC can seem like an endless thicket of forms and disclosures. The key piece of documentation, called the registration statement, generally goes through one to two rounds of revisions, even after being submitted to the SEC. Albert S. Dandridge, associate director of the SEC’s Division of Corporate Finance, notes that while the process generally takes two to three months, and perhaps a volley or two of paperwork between corporate headquarters and the SEC’s Washington office, a lot of companies bring undue complication into a relatively streamlined affair. “I’ve seen companies take a pass or two with the most paltry material,” recounts SEC attorney Guydon. “One corporation submitted a 16-page registration form, was told to beef that up, and finally quit.”

The SEC’s requirements range from a

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