1. If the company decides to go public, new internal control requirements and procedures need to be implemented. Such as Control Environment, Risk assessment, Control Activities, Information and Communication Monitoring. This is done to not only protect the company from fraud and abuse but also be in accordance with the law.
In reality, the successful public sale of a part of the equity of your company is neither a fantasy nor a nightmare, but rather the objective of a strategic business decision made after detailed consideration of all the pros and cons. Like most business decisions, the earlier you plan and more prepared you are, the better the results.
To go public, you have to have a successful business model that’s going to survive over the long pull. Strong brands generally have that. Normally, a strong consumer brand or a strong business brand has value under any circumstance. You also must have people with business sense. It’s the vision of management, more than anything else that determines how a company is going to do. Good management comes in very different packages, and what you have to do, of course, is to look at the key players’ record, their background. Many of the really good ideas were generated by the young technology people. But they just didn’t know how to run a business.
It is also important to understand some of the advantages and disadvantages of going public:
Advantages to Going Public:
1. Broader access to raising capital leading to increased financial stability. By going public, you tap into the single biggest source of capital in the United States. And one third of all companies that go public do a secondary offering within the first five years of going public; so for growing companies, this is a critical source of capital.
2. Establishes a market price for the company. This can be important for “marketing” the company. Owners often try to market the company as a way of...