I find it to be a common belief in the small business community that small businesses can't go public until they have important revenues, say something on the order of $10 to $20 million a year.
This is totally false.
I have been taking Small Businesses and Start-Up companies public as a consultant for over 15 years now. And for 15 years I have been repeatedly asked in diverse ways " Can a small business like ours raise capital by going public? We simply have a million dollars in revenue. Aren't we too small?"
The answer has been and still is "Yes, you can go public. And no, you are not too small."
What is too small?
Well truly nothing. A company who is bringing in one million in revenues would be no problem to take public. But it is truly not about your revenues, it is about your business plan. If you are working on a development stage business plan and you are making progress, then we can probably take you public with that alone. If you are making five, ten or twenty thousand a month that is useful as it just signifies that you are executing on your business plan.
It has become harder and harder to take a company public with no revenue and no business operations because the SEC and FINRA are rightfully trying to eradicate micro cap fraud, but yes it can still be accomplished. If you have no revenues, however, you will have to have patience, some money in the bank to guarantee you can survive for a couple of years, and you will have to be making genuine progress on your business plan to show the powers that be that you are a "true" company and not just a "sham" set up for micro-cap fraud.
If you are a small business and you don't think to be mom-and-pop forever, then "Going Public" is something you should look into in the very early stages. "Public" money is usually a lot cheaper as compared to "private" money.
I have seen private companies who feel they are too small to "go public" give up half of their company for a small six figure investment. At times companies with revenues in the millions feel they are too small and taking the venture capital route they raise ten or twenty million but end up with only five to six percent of the company in a few years.
This sort of dilution is totally unnecessary. The similar amount of money could be raised by going public while maintaining 60-65% ownership
Of course there are downsides to going public early too, but many of those have to do with being preyed upon by non-professionals, fraudsters, and others who really don't know what they are doing. If you look into your advisers and get advice and structuring and referrals from professionals who know what they are doing, you can eliminate most of the downside of going public early.
And if you feel you are potentially the next EBay or Google or Microsoft type of company, going public early on without venture capitalist could be worth billions and billions of dollars.
Bill Gates simply owns about fourteen percent of Microsoft. Imagine how rich he would be if he owned sixty percent!
Now after the "Can I truly go public?" type of questions the next set of questions I usually get are "How do I raise capital when I go public? Do I do a merger reverse? " or " I see ads that say - Buy reverse merger shell - should I do that? " But those are questions for another article. Stay Tuned.
Choose The Perfect CMS As Per Your Needs
Drupal is the CMS of choice for medium-sized and enterprise-level websites and has been voted the Top CMS in the World two years running. That's why Inseven Designs has made Drupal! Its top choice for clients.
Are You Hesitant To Converse Or Meet Up With Women?
Whenever you feel uncomfortable in any situation, it means that you are approaching this situation on too high a gradient. Rather than running away from the situation, lower the gradient.
Making Chunk Candlesticks: Understand A Bit More Regarding The Topic Of Creating Chunk Candlesticks
Chunk candles add a great alternative to the standard pillar candle of yesterday. These colorful candles add a vibrancy and life to them. Looking at chunk candles, they appear to be very difficult to make. However, just the opposite is true.
Different Ways Investors Can Make Money Investing In The Currency Markets
Investing in forex has developed as more and more investors become more educated and experienced with this lucrative investment option. Discover the various ways on how you can make money investing in forex.
T & S Brass Pre-Rinse Faucet - Introducing Commercial Faucets For The Food Service Profession
Today, T & S pre-rinse faucets remain the industry standard. Leading the way in creativity, they are pleased to announce their new line of T & S Mini Pre-Rinse faucets, designed to fit in compact kitchens and in confined spaces.
Mortgage Lender In Colorado - Why You Should Utilize The Services Of A Reputable Mortgage Lender When You Are Purchasing A Home
When buying a home, one of the important things you'll have to find is a Colorado mortgage lender company. There are many online corporations that can help you with your mortgage desires.
Don't Feel Scared During Handling Navman Sat Nav Because This Tool Is Very Simple To Handle
Looking for the right Navman sat nav can be tough if you don't know where to look for them. Learn how to choose the correct satellite navigation once and for all by reading this article in full.
Vitamin B12 Injections Are Incredibly Significant For Many People Suffering From Various Medical Conditions.
This article contains a lot of information on vitamin b12 injections which is very important for many people especially those suffering from pernicious anemia. Also vitamin B12 has plenty of benefits so you definitely want to add it to your diet.
Recent Comments