Going public costs, more than you would think…

01 Sep

Going public always costs more than one would think, even someone who is involved in the industry and has taken many companies public over their careers.  Recently we put together a cost estimate for one of our clients based upon a go public project last year.  We normally say going public costs $250,000 and an on going annual cost of $250,000 for the clients we normally provide services for.  What emerged was a cost of approximately $200,000 without any internal costs (which we normally include in the costs as well as recruiting costs for board members, executives, investor relations professionals, stock transfer agents, CPA’s, auditors, and others).

We provide the approximately breakdown here for reference only – please do not take these as non-volatile nor fixed in any way.  Please do not use these outside of for discussion purposes only!

This “Go Public” cost estimate document is copyrighted in 2015 by Rhodes Holdings LLC, all rights reserved.


Posted by on September 1, 2015 in BLOG


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2 responses to “Going public costs, more than you would think…

  1. Rhodes Holdings LLC

    September 9, 2015 at 9:11 am

    Good question! Buying shares in the market to effect a take over of the company almost never (99.9% of the time) makes sense as most micro-cap and small-cap companies don’t have the liquidity that would allow that. When you look at a micro-cap and you see a market capitalization of say $50,000, pose that question again. Same answer, especially when you see 200+ shareholders – think about how you get that many people to sell to you. Then look at the big block holders – most of them probably still have their shares held in restricted certificates which can take months to clear.

    Then you have to take into account the SEC rules associates with proxy statements, which truthfully I am ignorant of the exact rules because that is complicated and would require much legal advice, and even then, I bet it is easy to go afoul of those rules.

  2. Scott brown

    September 9, 2015 at 8:37 am

    Hi . Can you buy shares cheaply and just take the stock over that way . Would that be cheaper?


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