There are multiple advantages for smaller, high growth companies, especially those in emerging industries, to move toward an initial public offering (IPO).These include:
1. Creating more capital-raising opportunities and financing options, typically at a higher valuation and a lower cost of capital.
2. Establishing a value for the company’s securities by creating a public market for them.
3. Increasing liquidity for existing and future investors and providing an exit strategy for venture and institutional investors.
4. Providing gravitas and visibility that is often associated with being a public company which may, in turn, generate greater interest and awareness of the company.
5. Creating a second currency with the Company’s common stock to use that equity instead of cash for acquisitions, attracting and compensating management, employees, directors and strategic partners.