Direct Listings - Direct Public Offerings

Many business owners have the goal of taking their company public, and raising capital, but are not large enough to justify the expense of an Initial Public Offering (IPO). These companies can grow quickly through acquisitions and mergers in order to reach the right size. Pacific Business Advisors can assist entrepreneurs find suitable acquisition targets and merger opportunities.

Notwithstanding, IPOs are still costly because an underwriter must be hired which can easily cost 5% to 7% per share.

Fortunately, it is possible to avoid hiring an underwriter and the IPO process by taking a company public by means of the direct listing process (OLP), also known as a direct placement, or a direct public offering (OPO). A direct listing also avoids lockup agreements and dilution of the existing shares.

Upon listing of a company's stock, whether by means of an IPO or OPO, the company will be subject to the reporting and governance requirements of all public companies. A CPA can advise you about these requirements.

Most OPOs do not require the issuer to register with the Securities and Exchange Commission (SEC), but they must comply with state disclosure laws. Companies that go public using a OPO will trade their securities in the over-the-counter market because they will rarely qualify for listing on an exchange.

Prominent companies that have recently gone public using the OLP are Ben & Jerry's Ice Cream and Spotify. You may be next.

While our firm can assist clients with mergers and acquisitions, owners intending to go public should see,k the advice of legal counsel.
Office: 818-991-5200
Direct: 818-991-9019