Get Your Business Funded: Creative Methods for Getting the Money You Need

Overview

Okay, so let's say that you have created a very cool company and that, unlike Pets.com, it is a viable business. Maybe you went through some or all of the financing rounds mentioned in previous chapters—friends and family, SBA loans, angel investors, and even some VC money. So now you have reached the pinnacle, prompting the question: Is it time to go public? To even get to that point is an amazing accomplishment that very few businesses aspire to, let alone reach.

Why would a private company want to go the IPO route and become a publicly traded company? After all, there are definite benefits to remaining private. There are fewer people to be accountable to and the strict SEC (securities) laws that regulate publicly traded companies are not applicable to privately held businesses. Consider that in 2011, Facebook still had not become a public company because founder and CEO Mark Zuckerberg found numerous benefits to remaining private. (That said, Facebook also did not need the money that an IPO can generate.)

But despite the benefits that may come with being privately held, the first and main reason a company would want to go public is money. By selling shares of stock in the company to the public, the business can generate millions of dollars.

Beyond that, there are some additional motivations for going public:

• Increased exposure
• Status
• Diversifying the financial base of the company
• Generating cash for the owners

How does one actually take a private business public, ...