What is a Public Offering?
A direct public offering is an initial public offering (IPO) where the company is its own underwriter. The cost involved in this process is relatively inexpensive when you consider the control that it provides in managing your company’s financial destiny.
A direct public offering is different from an underwritten public offering in that most early stage companies will not be able to secure a legitimate underwriter in spite of what con artists might tell you. This is a simple reality and most firms that claim to provide such services to early stage firms will simply fail to create any market at all. In contrast, the direct public offering process circumvents the need for an underwriter or market maker because the company undertakes the role of creating the market. This process has been conducted successfully by many well known companies such as Ben & Jerry’s Ice Cream, Costco, and Tully’s Coffee.
When to Consider a Public Offering?
Like many companies, you may have already utilized your personal financial resources and exhausted friends and family as capital sources. In such cases, most companies have to resort to soliciting (actually “begging” is a better description) institutions and broker dealers to sell their offerings. Unfortunately, these distribution resources are so picky that many company owners and officers begin to question the worth and viability of their business. It is generally a daunting and demoralizing task because of the amount of rejection involved in the process.
Utilizing the services of our firm to take your company public through an IPO can permit you to “control your own destiny” in spite of the naysayers. The IPO process will involve approximately six months of legal and regulatory processing but we will manage this entire process for you and we maintain a highly experienced securities law team for this purpose.
What are Public Offering Advantages?
- Your organization will be able to “cut out the middle man” – the institutions and broker dealers. You also avoid the demeaning process of begging them to invest in your business.
- You can appeal directly to the public at large in ways that you could never imagine with a private placement – with a public offering you can advertise your investment offering directly to investors through TV, emails, and other forms of powerful advertising.
- You aren’t limited to only selling to accredited or high net worth investors – you can sell to non-accredited “regular” people.
Why Choose Us?
Our team has more than 30 years of combined securities and business law experience and our objective in serving clients is not simply to draft your IPO legal documents. Public Offerings (IPO’s) require the high level of skill and experience that our IPO/ Public Offering attorneys can provide. However, the typically high cost of drafting a public offering is an obstacle for many companies. Our firm provides a unique combination of experience, professionalism, and competitive pricing. Most large law firms will bill clients between $250,000 and $400,000 to draft an initial public offering (IPO), and midsize firms charge between $150,000 to $200,000.
How is Our Service Different?
- There are few securities law firms in the country that provide the combination of services that we provide at the price point that we offer. We can comfortably make this assertion because of the breadth of our legal and business expertise and the fee structures associated with our service offerings.
- Our law firm and its sister company, Centarus Business Consultants, Ltd. are not only familiar with the IPO legal filing process but we are one of the only firms in the country that is familiar with the retail distributions of such securities.
- Our Securities lawyers serve primarily microcap clients.
- In addition to reducing your cost during the issuance of your IPO our relationship with highly skilled accountants can produce a total annual savings amounting to hundreds of thousands of dollars in accounting and legal fees.
Is Doing an IPO Right for Your Company?
Do you firmly believe that if the public at large had access to your company’s offering through general solicitation (direct mail, presentations, radio, TV, or other media) that a sufficient number of investors would be excited enough about the offering to invest? Next, do you firmly believe that the investment in your company has to be substantial enough to eventually justify the financial expense of the IPO? Try to pull ego out of the analysis. As a comical example, going public to be able to say at the country club that you are the President or CEO of a publicly traded company is generally a bad idea. Additionally, besides the one time filing fee mentioned at the beginning of this information piece, there are annual accounting and legal fees that will be incurred. However, if through a direct public offering you are able to raise the capital you require to take your business to the next level, these fees are frequently incidental.
Call us today to discuss going public.