Go Public, Initial Public Offering (IPO), Reverse Merger, Public Shell.
We assist companies in going public on the NYSE, American Stock Exchange, NASDAQ, OTCBB (Over the Counter Bulletin Board) and the Pink Sheets. There are no asset or revenue requirements to go public on the OTC Bulletin Board or the Pink Sheets; so, even a start- up can go public.
There are many benefits that being a public company offers such as increased valuation, using public stock as currency to acquire other companies and assets, liquidity, prestige and to reduce the need for expensive venture capital and other financing sources. It also makes it much easier to raise capital because once you become public, you gain instant credibility and a benchmark trading/capital raising price, and increased liquidity for founders and shareholders alike. Since public companies are typically valued much higher than their private counterparts, many sophisticated CEO's go public without simultaneously raising capital and thus receive a higher valuation and benchmark stock trading price. Then, as a public company, they conduct a private placement (PIPE) at a discount to the market with the provision that the investors hold the stock for 6 to 12 months.
Star Capital specializes in the small to medium-sized company. Our turn-key service is designed to assist you through each and every stage of the process, from our initial assessment and planning until the entire process is complete and then even beyond. Star Capital gives you all the service, resources, skills, and experience necessary for your company’s success in the public marketplace. We thoroughly understand and recognize the power a public company in utilizing opportunities not available to private companies.
Here is a further breakdown of the benefits:
Access to Capital—being a public company usually gives investors much more confidence to invest in your company. Once public, a company’s financing alternatives are greatly increased. Often investment bankers and venture capitalists will require that a company is publicly traded before committing funds. A publicly traded company can go to the public markets for capital via a stock or bond issue, and may also convert debt to equity. When your stock has a public price, it gives you a benchmark value to raise capital. Any potential investor can go on the Internet or call their broker and get a quote of your company's stock price. Some public companies then give investors who buy stock directly from the company in a private placement (PIPE) a discount from the public trading price if they are willing to hold the stock. This gives investors even more of an incentive to invest. This new found capital can be used for a variety of purposes including; growth and expansion, retiring existing debt, corporate marketing and development, acquisition capital and corporate diversity.
Increased Valuation—it pays to go public. The market value of a public company is generally substantially higher than its private counterparts. The result is a substantial increase in the value to its founders and shareholders. Statistics published by the U.S. Chamber of Commerce show us that publicly traded companies typically sell for an average of 25 times earnings rather than only 4 to 6 times earning like their private counterparts. We have also seen many companies that were private and about to be purchased, go public to be purchased at a much higher price.
Increased Liquidity—By going public, a company can create a market for its stock. This gives the company a much greater opportunity to sell shares of stock to investors. Usually, stock in a public company is much more liquid than stock in a private company. Liquidity is created for the investors and founders alike. Investors in the company may be able to buy or sell the stock much more readily. Ownership of stock in a public company may help the company's principals to borrow more easily and eliminate personal guarantees. Liquidity can also provide an investor or company owner an exit strategy, and portfolio diversity. Greater liquidity is one of the many reasons why public companies are typically valued so much more than a private company.
Public company stock can be used to grow through acquisitions/mergers. Making such acquisitions is also usually substantially less expensive and easier when public.
The company founders usually suffer much less dilution when raising capital.
Going public gives your company greater credibility, clout, and prestige with customers, employees, the press, and the entire financial community.
Being public allows you to attract and retain higher quality employees with stock incentives.
Public company stock is generally more desirable to use in estate planning for the company principals. Public company stock can also provide a long term exit strategy for company founders.
In short, going public opens many doors for your company and, with us, it is affordable, rewarding, and with Star Capital…turn-key.