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Going public or going private

24 Jul

This last week, the Houston Business Journal for the week of July 20 – 26, 2012 had two divergent articles (“Are you considering going public?” and “Are you considering going private?“) – appropriate as part of the FOCUS section on Public/Private Companies report.  If you are at interested in the process of being a public company, this is a must read.

Public companies

The first article was a great read.  As I have summarized many times before, being a public company is a dual edged sword – there are benefits, but the costs are substantial.  Here are the benefits that the article summarized:

  • Ongoing access to capital
  • Able to provide [public stock] incentives to employees
  • Enhanced prestige with businesses and individuals

But at what cost?

  • Owners must relinquish some amount of control (except if you are Facebook CEO Mark Zuckerberg who had such a hot property, he was able to retain 51% control during an IPO)
  • Dealing with regulators and shareholders

That’s where a team comes in – if you have a huge company (like a Small Cap corporation, which is $2B to $250M in market capitalization), then the investment bankers will be interesting in helping you.  If your company is more modest, that’s when you call in teams like Rhodes Holdings LLC and its partners, including Re-Cap Marketing and Consulting and others.  Our strategy engagements gets you ready, and helps you retain the professionals focused on the Micro Cap arena (below $250M in market capitalization).

On the other hand, going private

 

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