Access to
capital and future financing opportunities
Going public provides your company with equity financing opportunities
to grow your business - from expansion of operations to acquisitions.
The issuance of public shares will expand your investor base, and will
help set the stage for secondary equity financings, including private
placements. As well, issuers often receive more favorable lending terms
when borrowing from financial institutions.
Increased
visibility and prestige
Going public enhances your company's visibility. Greater public
awareness gained through media coverage, publicly filed documents and
coverage of your stock by sector investment analysts can provide your
company with greater profile and credibility. Ultimately, this will
result in a more diversified group of investors following your company,
which may increase demand for your company's shares and thus increase
your company's value.
Liquidity for
shareholders
Becoming a public company establishes a market for your company's
shares, providing your investors with an efficient and regulated
vehicle in which to trade their own shares. Greater liquidity in the
public market can lead to better valuation for shares than would be
seen through private transactions.
Create
employee incentive mechanisms
Your employees can participate in the ownership of your company and
benefit from being a shareholder. Stock options and employee share
purchase programs are a good mechanism for compensating your employees
without depleting cash reserves.
This can serve to ensure stronger employee commitment to your company's
performance and success. Share options in a public company have an
immediate and tangible value to employees, especially as a recruitment
incentive.
Facilitate
growth
As a public company, your shares can be utilized as an acquisition
currency to acquire target companies, instead of a direct cash
offering. Using shares for an acquisition can be a tax efficient and
cost effective vehicle to finance such a transaction. This can also
improve your ability to complete mergers and acquisitions in a more
timely and cost-effective manner.
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