Is My Company Big Enough?

Going public fast. That is what we do. Comparing the Initial Public Offering (IPO) to the Direct Public Offering (DPO), the DPO has significant advantages. Most experts agree that the DPO tends to work better for smaller companies.

Here is why. With the IPO you must specify how much capital you will raise. If you don’t hit the target you don’t get approved. With the DPO there is no such requirement and the approval rate for our clients approaches 100%. Our network consists of attorneys and accountants who are very experienced in securities laws and tax accounting. So, experienced members of our team handle the process with precision. You can go public with practically any company. It will be traded on the open market and, like other companies, it will have its own ticker symbol or stock symbol.

Proportion of Large to Small Public Companies*
The above table should answer the question, "How big does my company have to be to go public?" You will notice that 52.6% of publicly traded companies are from between $0 and $128.2 million in value and 78.5% are considered to be "Smaller Public Companies."

Worldwide, there are about 63,000 public companies. Approximately 15,000 of them are in the US. One-third of them are traded on the exchanges. The other two-thirds are traded on over-the-counter markets. NYSE has 2300 companies (15%). NASDAQ has 2800 (18%). NYSE Amex has 300 (2%). On the OTCQX, there are 161; OTCQB has 3848. OTCBB has 21. (Cumulative Over the Counter 25%), Finally, the Pink Sheets have 5904 (39%). So, in total, the smaller companies, which tend to comprise the OTC and Pink Sheet market is 65%. In addition to the above, about 7,000 are in the “grey market” and not listed on exchanges. We are able to assist you if you want to go public in any of these markets or exchanges.

As indicated above, most of the smaller companies that go public start on the Over the Counter Bulletin Board or Pink Sheets. The reason is that they have NO asset requirements and NO income requirements. Later, as the income and/or assets increase the company can move up to NASDAQ. NYSE has larger income and asset requirements. Microsoft has remained on NASDAQ since its stock debuted on the market.

Many attorneys recommend that people interested in going public with their companies start on the OTCBB or Pink Sheets. The regulations and requirements for the Pink Sheets are far less stringent than are other markets. The process is extremely fast. The cost is relatively low. Plus, there are NO intermittent SEC reports and NO audits. So, to go public quickly, starting out on the Pink Sheets is often the way to go. From there, it is an easy step up to the OTCBB. So, if you are planning on going public and listing on Over the Counter Bulletin Board, Pink Sheets, NASDAQ, AMEX or NYSE we can help.

Trust and Know-How
Our company was established in 2008. One of the handful of members of our network attended law school at New York University about 15 years ago and has been working in the equities markets helping companies go public for many of those years. We form public companies for our clients worldwide, including North and South America, Asia, Europe and Australia. In addition, we have taught corporate seminars across the US and Canada.

Going Public Right
When doing an IPO or DPO there are two main things that happen. First is raising capital for the business enterprise. Second is completing the formalities such as the legal filings and the accounting audits. Both should be overseen by licensed professionals such as those that are provided by our team of specialists. We provide a complete package by assisting with both of these important and necessary tasks. The end game is to have a stock symbol and CUSIP number as well as authorization letter to trade from FINRA. As such, the general population will be able to call their brokers or go on the Internet and buy your stock.

Going public through a DPO may be the way to go for companies that are on the smaller end of the value scale. They may not be big enough to get the attention of an underwriter. But, as we see above, since small companies are by far the majority of publicly traded organizations, with the proper promotion (such as those provide by our organization) they able to attract enough investors present with a very successful offering. Plus, with an IPO, you must state how much capital you will raise. If you don’t hit that target, you don’t go public. A DPO, on the other hand, is not bound by the requirement raise a predetermined amount of capital.

Those who have a desire to go public can realize several benefits. The company will generally see a significant increase in value. The stock can be used to buy other companies, to pay for advertising and equipment, and to attract skilled employees. Borrowing money from a bank may result in the bank foreclosing on your company. Being available on the open stock market, when properly structured, does not bear this risk. Venture capitalists tend to want a controlling interest in the company, 51% ownership or greater, before they will invest. Becoming a public company does not require a loss of control. With a DPO, you will generally retain 80% ownership or more unless you chose otherwise at a later time. (During a majority of his reign at Microsoft, Bill Gates held about 30% of the company's stock.)  It is also much easier to raise capital than it is for a private enterprise because it is just a matter of going online and buying shares. Investors feel much more comfortable because the share value is clearly published and the equities are easy to liquidate.

As a result of this increased investor demand, public companies are by and large valued much higher than private companies. Here is a secret technique that many CEO’s will use to increase the share value. Like other prices, stock prices are based on supply and demand. So, knowledgeable CEOs might limit the supply of tradable shares by offering stock shares for a discount if the investors hold onto the stock for one year or more. Thus, limiting the number of tradable shares (lowering the supply). Then, they will hire promoters to tout the stock to the investing public (increasing the demand). Both of these clever tactics tend to boost the stock price.

Here is an Example of This Special Way to Use a Public Company a to Raise Capital
A new small software company goes public. Its opening price per share is $50. So, anyone of legal age can go to etrade.com, schwab.com, or other stock brokerage house and purchase the stock for $50 a share. The company can have a separate, additional offering for investors. It can, for example, sell some of its stock directly to the public, and/or through brokers, at $42 per share. These shares are offered with the stipulation that those who acquire them for this discounted price must hold the stock for a year (or other time specified in the special offering). This discounted price tends to entice many additional people to invest in the company. The holding period also tends to stabilize the share price because fewer investors are able to sell in this timeframe.

It is responsible to note that this technique is usually used in the beginning to give the company a boost in value for a specified period of time. The long-term stock price growth, however, comes not from short-term tricks but from the CEO taking continuous action to boost the bottom-line. Master investor, Warren Buffett, often quotes his mentor, Benjamin Graham, saying, "In the short run the market is a voting machine. In the long run it's a weighing machine."

What About Public Shells and Reverse Mergers?
A public shell is a company that has been approved to trade on the public market yet is not currently conducting business. A reverse merger is where an existing operating company merges or combines with a public shell company. The two companies become one. The “surviving” company named in the merger documents is the public shell company. Thus, the active company becomes a public company very quickly. This is the way to go if speed is of the essence. It is important to be sure that the public shell does not have pending liabilities. A clean public company that has not conducted business, or has only conducted business with a closely associated company (often with the intent of being sold as a public shell) could provide the best of both worlds.

Let’s talk about some different types of public shell companies. First, there are the ones that currently conduct ongoing businesses. They already have stock ticker symbols. There may be liabilities or potential liabilities that could result in future litigation of which the former owners may be unaware. They also tend to be quite pricey. Moreover, these companies already come with existing stockholders lurking in the hinterlands; perhaps hundreds or thousands of them. The anticipation of the merger may make the stock price increase temporarily. Once the stock price goes up, many shareholders may sell at once in order to reap the profits.

This mass selling makes the stock price crash. The price movement is called the “float.” The sinking stock price, which has no link to business fundamentals, decreases your stock value, thus lessens ability to use the stock to buy other companies. This value difference may cost you a lot more than the actual price to acquire the public shell. This point is essential to understand. The small company price float may not give you a good first impression of your going public experience. So, to save yourself from emersion in the boiling water of similar circumstances, merge your business with a brand-new, non-trading public shell company. These entities are free from the same kinds of potential liability and pre-existing shareholder folly that so often follows a newly merged enterprise.

The next option may give you a much more pleasant experience: public shells. Public shell companies have few shareholders. They are properly registered with the SEC. The public shell company is established with the sole target of being sold to and merged with a private corporation. There are a multitude of entrepreneurs that utilize these entities to meld into exiting businesses. Once an attorney, businessman, or accountant finds one that they want, they will acquire it and then file merger documents so that the blank check public shell and the operating corporation become one. This process is the fastest way to go public.

The vast majority of small businesses start trading on the Over the Counter Bulletin Board (OTCBB). Once approved by the SEC and FINRA, a company can begin trading right away on the NASD FINRA OTCBB. Another option is to go public on the Over the Counter Pink Sheets. Once the specified annual sales and/or asset figures are reached, the company may trade on the NASDAQ or, for very large organizations, the AMEX exchange.

When we help your company go public, our attorneys, who are specialists in Securities Law, are intimately involved in the process. So, if you want your operation to become a publicly traded company the first thing we ask you to do is to make a call to the number posted above. We will ask you some questions to make sure that you are a proper fit for going public. Not only do we consider the financial aspects of a proposal. We also assess our gut feel for a potential client’s ethics, honesty, and overall moral code. Our firm only wants to work with individuals who have the best interest of its shareholders in mind. In the same vein, the top CEOs in the game also face the public market from the same perspective, those of the shareholders and customers. They know if they focus is on giving, they will receive abundantly more in return. Moreover, we feel it is the only way to do business.

We have access to public shells that you can use to do a reverse merger. More commonly, we take a company public by filing the proper documents with the Securities and Exchange Commission and FINRA. Our organization has been around since 2008 and we can perform the process of going public as fast as anyone else out there. Our team has helped over 100 companies to go public. When you call we can go over the options so that you can make the right decision for yourself. We can talk about the most cost-effective and profitable methods. We do not give legal or tax advice. Our licensed professionals will handle those aspects of the game. So, the information contained herein is not advocating one method over another. It is simply to provide you with information and education so that you will be better prepared to discuss these items with our pros when the time comes.

More Public Company Information
There is an abundance of free information here to give you a level of comfort about Going Public. The difference with us is our years of experience in the field. Since 2008 we have been serving the public markets. We have literally thousands of clients around the world who trust us to meet their corporate service needs; many of whom utilize our services again and again.

Our team members include some of the best and most experienced securities attorneys and experienced CPAs who will assist you with your legal and accounting needs. We have been involved in private placements and public offerings, mergers and acquisitions. Our licensed professionals have also given tax and legal counsel to other lawyers and accountants who have been interested in taking their clients public.

Professional people who do not specialize in raising capital for businesses may not have the proper background to properly advise clients. For example, inexperienced individuals may suggest that you search for venture capital. However, experts warn that venture capitalists usually insist in coming in and taking more than half of the ownership. They want to control of the business. An experienced individual, on the other hand, can help you raise the same amount of money or more by helping you go public. In the process, you retain about 80% of the ownership.

So, it is preferential that you find a network of professionals who have been there and done that. The experts associated with our firm specialize in securities law, know how to draft a private placement memorandum, have contacts with market makers, and include securities attorneys who know how to steer you in the right direction.

Thus, you want to have you public company established by a team of specialists who have gone through the process many times before. The documents that are legally required to do a private placement comprise an essential first step in the process. Once this is done the funds raised can be used to take the company public or buy a public shell corporation. In any event, the end result is that you go public. Your company is traded on the stock exchanges.

The professionals can also keep you updated on changes in securities laws so that your company is continuously compliant. In addition, promoting your stock is a continuous process that can be handled by the investor relations personnel. These can be in-house or a firm that is contracted out. We can help when it comes time to conduct mergers and acquisitions in order to keep up the growth and earnings curve.

Go Public from A to Z
Ask a retail food store employee where the beans are in one establishment and he will tell you, “I think they’re in aisle seven.” Ask in another and he will walk you to aisle seven and point them out. We are the second type of company. We walk you through the process, step-by-step and do 90 percent of the legwork until your stock symbol is scrolling across the ticker board. Then, we will go the extra mile and promote your stock with the intent of boosting the price to an attractive value.

For those contemplating going public, we take the time to go over the options. You can consult with our experts so that you can make the decision that is right for you. If you have a one-person company or a senior executive team, we can assist you and can provide you with free tips and information to help you make the right decision.

Do you know someone else who wants to go public? 
Those who are in the know realize that operating with a public company can take one to the next financial level. It is the easiest and least painful method to raise a great deal of capital and to add several more digits to one's financial statement.

Is My Company Big Enough to Go Public?
In order to go public, you simply need a plan, not a million dollar enterprise. As we have stated, by far, most public companies are small companies.

A US company or foreign company can go public. It is not necessary to have been operating for any particular length of time. There are not any requirements for a certain amount of income or a certain asset value before you can go public. What that means is that almost any company is eligible for going public. Therefore, if you want go public on the Over the Counter Bulletin Board (OTCBB) or Pink Sheets there is little stopping you. Moving to the next step and going public on NASDAQ, AMEX and NYSE does have specified asset and income requirements. We can also assist you in listing with these exchanges if you meet the minimums for these markets.

The Difference Between the OTCBB and the Pink Sheets
Both the OTCBB and the Pink Sheets are mainly utilized to trade the stock of small companies. Both of these markets trade over the counter rather than through the large exchanges. There are a few differences.

There are two kinds of companies that trade on the OTCBB market. First, are the companies that have recently become public and are not large enough for the big leagues. (I.e. they are on the large exchanges such as NASDAQ AMEX and NYSE.) The other kinds are the companies that were once on the major exchanges but have become delisted from them because of lower revenues and/or assets. These companies are not typically in the best of financial health and do not tend to be the best investments. The second type, however, can be very attractive to an investor because they tend to be progressing companies that can easily move onto the big exchanges with sufficient growth. Though it is easy to get on the OTCBB, there are still some minimum requirements that change slightly from time to time. These companies do disclose their financial status.

Organizations that trade on the Pink Sheets do not have minimum financial requirements to meet. They are usually very small companies that do not want to reveal their financial condition to the public. Often these companies are termed “penny stocks” because they tend to keep the stock prices down to attract a certain niche of investors who want to invest very little.

The Over the Counter (OTC) market has been in existence for over 100 years. It lacked sufficient structure and organization until fairly recently. Thus, efforts have taken place to systematize the market so that buyers and sellers could find each other more easily. Leaps and bounds forward were made with the dawn of the Internet.

The result was two different quoting systems: The Over the Counter Bulletin Board (OTCBB) and Pink Sheets.

NASDAQ runs the OTCBB. They also prescribe many of the rules for trading on the OTC market. Stock can appear on the OTCBB that is not listed on the NASDAQ.

The Pink Sheets were provided by a company named National Quotations Bureau (NQB) that was established in 1913. Its purpose was to give investors information about stocks and bonds that are traded over the counter (OTC). At this time, the company primarily provides electronic quotes and company information through its website. NQB changed its name to Pink Sheets LLC in 2000. It then changed to Pink OTC Markets Inc. in 2008. It provides non-exclusive securities information to the public.

What does this mean to you? OTCBB has financial reporting rules. The Pink Sheets do not. The Pink Sheets quote investments that may also be listed on the OTCBB as well as investments that do not qualify to be posted there. OTCBB stock tend to attract more investors and tend to be able to attain higher stock prices because the financial disclosures attract greater investor trust. It is worth noting that a substantial number of OTC stock shares are not found on the OTCBB or the Pink Sheets. They have trading symbols assigned by FINRA so they can legally comply with securities reporting transactions but are not listed in the major or minor markets. These securities are commonly referred to as "gray market” securities. The grey market is also a over-the-counter market. In the grey market, traders may transaction orders for special, select customers. It is also used to sell a limited number of shares in order to test the market's desire for the stock before it is issued to the public. It also lets the underwriters know how much hunger there is for the stock as to choose an initial price for the stock offering.  

More about the Pink Sheets
Several small companies choose to trade on the Pink Sheets. As mentioned, the reason this is becoming popular is that they do not require the companies to systematically report with the Securities and Exchange Commission (SEC) or provide audited financials. In addition, listing on the Pink Sheets does not require your company to meet certain revenue or asset requirements as do the large exchanges. It may surprise some people to know that there are a number of large companies that trade on the Pink Sheets. Rolls Royce, Nestlé, Heineken, Nintendo, Volkswagen, Cathay Pacific Airways, Liberty International, Peugeot, L'Oreal, Marks & Spencer and Neorx Corp are just a few. There are a substantial number of executives who want to be public but do not want to provide audited financial statements or SEC reporting. The Pink Sheets provide that attractive option.

Go Public the Right Way 
If you have read this far, you will likely go public. Why is now the right time? Because we know of no better way – in good times or bad - to raise capital and increase your net worth as quickly and easily.

Why are we the right company?

-Experience
-Know-how
-Low up-front cost
-Licensed attorneys and CPAs are included
-A professional investor relations team that goes the extra mile to promote your company and boost your stock price

Simply put, we are the best in the business at getting a company to go public quickly and at promoting the stock to the masses. We can get your company traded on the OTCBB, Pink Sheets, NASDAQ, AMEX or NYSE.

A publicly traded company is one of the most powerful tools in business. Those who have achieved the pinnacle of financial success from the North America, Asia, Europe, Australia and even Africa have found this to be true. We have clients from the United States, Canada, Brazil, China, India, Japan, South Korea, Germany, the UK, Australia and many other countries around the globe. So, if you want more information, call the number above or complete the form on this page and tell us more about yourself and your business.