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Is going public right for your company? Maybe. Going public can be a defining moment for an organization, accelerating growth potential and strengthening reputation. 2

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Is going public right for your company? 3 But maybe not, because of increased…

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Get the full report Is going public right for your company?

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5 There may be a better way.

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Alternatives to an IPO Exempt offerings These offerings are exempt from SEC registration, and include smaller securities offerings under Regulation A and Regulation D, Rule 144A private placements, including both equity and debt offerings. Advantages Capital markets can be accessed without costs of SEC registration and ongoing periodic filings. The Jumpstart Our Business Startups (JOBS) Act has removed some traditional roadblocks to executing exempt offerings. Disadvantages In most cases, a company can raise more capital through an IPO than an exempt offering. In many types of exempt offerings, securities may be sold only to qualified buyers, limiting the pool of potential investors. 6

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Alternatives to an IPO Crowdfunding An emerging means of raising capital by obtaining a series of smaller investments from a large number of people, typically through the use of social media. Advantages Entrepreneurial companies can raise capital that traditional investors or lenders are unwilling to provide. Can be less costly. Disadvantages The JOBS Act established the regulatory foundation for crowdfunding's equity model, but companies may not offer or sell securities until the SEC adopts final rules. Final SEC rules are likely to significantly limit capital that can be raised each year through crowdfunding. 7

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Alternatives to an IPO Secondary market transactions Private transactions that allow investors/employees to liquidate their stock holdings to qualified investors. Advantages Original shareholders or option holders can monetize some or all of their holdings. Disadvantages This alternative is available only to certain well-known private companies. This is not a means to raise capital for the business itself. 8

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Alternatives to an IPO Debt financing Involves borrowing money from a financial institution or via private financing. Advantages The equity owners' interests in the company are not diluted. The after-tax cost of borrowing funds can be less than issuing equity securities, mainly because interest expense is deductible. Disadvantages It imposes an obligation on a company to make periodic payments of principal and interest. It can constrain future growth if a company becomes "too leveraged." 9

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10 Is going public right for your company? Every business must reach its own conclusion, in consultation with financial, legal and accounting advisors.

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