If you like this presentation – show it...

Slide 0


Slide 1

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

Slide 2

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

Slide 3

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

Slide 4

5 There may be a better way.

Slide 5

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

Slide 6

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

Slide 7

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

Slide 8

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

Slide 9

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

Slide 10

Grant Thornton International Ltd is one of the world’s leading organizations of independently owned and managed accounting and consulting firms. Member firms provide assurance, tax and specialist advisory services to privately held businesses and public interest entities. Clients of member and correspondent firms can access the knowledge and experience of more than 2,900 partners in more than 110 countries and consistently receive a distinctive, high-quality and personalized service wherever they choose to do business. Grant Thornton International Ltd strives to speak out on issues that matter to business and which are in the wider public interest and to be a bold and positive leader in its chosen markets and within the global accounting profession. Tax Professional Standards Statement This document supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the subject of this document, we encourage you to contact us or an independent tax advisor to discuss the potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this document may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this document is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. 11 About us Grant Thornton is one of the world’s leading organizations of independent audit, tax and advisory firms. These firms help dynamic organizations unlock their potential for growth by providing meaningful, forward-looking advice. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to understand complex issues faced by privately owned, publicly listed and public sector clients and help them to find solutions. Over 35,000 Grant Thornton people in more than 100 countries are focused on making a difference to clients, colleagues and the communities in which we live and work. In the United States, visit Grant Thornton LLP at www.GrantThornton.com.