What Is Going Public and Why Your Company Needs an IPO

Planning for your company’s growth is vital. Without the right growth plan, your company cannot prosper. One of the best ways to increase financial growth and profitability for businesses is by going public. When you go public, you provide an Initial Public Offering (IPO). The choice to go public allows you to become a publically traded business and raise funds for expansion.

The choice to go public has many significant advantages for businesses. As mentioned, an IPO gives you the chance to raise capital with the help of investors. In addition, going public can also help to make the acquisitions process simpler and easier for your company, while simultaneously diversifying ownership of the corporation (because it will be publicly owned). It also increases prestige for the company making the initial public offering.

However, there are some disadvantages to the situation, and while they are not detrimental, they should be understood before making a decision to go public. For instance, going public certainly does increase costs due to filings and other associated fees necessary to take a company public. Also, going public puts greater restrictions on management and trading, as well as pressure on short-term growth for the business.

Of course, the decision to go public is not something that can be made overnight. To make an initial public offering, the company needs to meet several key criteria. In fact, in the US these criteria can be quite stringent, and can include severe financial audits. However, this is not the case in all markets. The choice to go public through another stock exchange can be a beneficial one for companies seeking to realize the benefits of going public without the hassles found in the New York Stock Exchange or Nasdaq.

For instance, the choice to go public through the Frankfurt Stock Exchange is one that has been growing in popularity through recent years. Many companies in the US and Canada have made this choice, due to several factors. For instance, if you make an initial public offering in Frankfurt, you do not have to undergo the same rigorous qualifiers. In addition, German investors are far hungrier for new investment types than US investors, resulting in a much more profitable experience. A company can go public in Frankfurt, reap significant financial advantages, and boost company prestige.