1 April 2021
The Entrepreneur’s Decision To Go Public With a Micro-Cap IPO
A micro-IPO is a unique funding opportunity for entrepreneurial companies to access capital and gain access to the public markets. You’ve probably heard about some of the bigger initial public offerings (IPOs) of 2021, such as Coinbase Global Inc. (NASDAQ:COIN), Warby Parker (NYSE:WRBY), and Rivian Automotive Inc. (NASDAQ:RIVN). Perhaps you’ve also heard about special purpose acquisition companies (SPACs), the latest venture capital deals and debt restructuring plans that are all the buzz on Wall Street. Today’s robust markets present companies with several avenues to raise capital. Perhaps the most well-known and anticipated way to raise capital is through the IPO process. Last year saw a record number of IPOS with 1,058 compared to a total of 480 for 2020. As these traditional forms of funding capture the world’s attention, a vastly underappreciated form, the micro-IPO, often takes a back seat. Yet, the micro-IPO represents a potentially great opportunity and a massive shift in the capital markets space, particularly for companies with a market capitalization between $50 million and $300 million (or micro-cap). A micro-IPO is a unique funding opportunity for entrepreneurial companies to access capital and gain access to the public markets. Many entrepreneurs are not aware that even early-stage, pre-revenue companies from anywhere around the globe can raise capital and list on U.S. senior exchanges. Until recently, there was a belief that a company that wanted to go public needed a minimum of $100 million in revenue to attract an underwriter. Now, accepting the additional risk, investors can directly access potentially high-growth companies, and entrepreneurs have a clear path into internationally recognized capital markets.