The usual initial public offering (IPO) is quite an endeavour.
A company files a registration statement with United States Securities Exchange Commission (SEC) to register shares of stock for sale to the general public.Registration requires an independent audit of the company's financials and preparation of a sales document disclosing the true nature of the company's business plan and a Plain English reckoning as to its operating condition. SEC reviews the registration statement and either pass the document as sufficient disclosure or reject the document, providing commentary as to what parts seem, in their judgment, deficient or inaccurate. The company amends the document and resubmits, beginning the process of review once more. This continues until SEC declares the registration 'effective'.
Efficiently pursued, the process of registration to the point of SEC and state declaration of your IPO's "effectiveness" and readiness for sale of shares generally takes between six and twelve months and usually costs between fifty thousand and two-hundred-fifty thousand dollars. Inefficiently pursued, the process can cost millions of dollars and may drag on for years.
During the time between the initial filing and final effectiveness, SEC allows the company to raise no money through the sale of securities. The lengths of time to pass SEC registration, and restrictions/prohibitions on the sale of securities while in process of registration weigh as a heavy load on smaller, under-funded companies who need outside money to progress.
If one takes advantage of Sirius' Grass Roots methodology, one easily avoids crushing expenses and distractions from executive duty.
By first selling shares to Accredited Investors and SCOR investors and as of 2012, to any person with a relationship to the issuer or who represents an incoming query, without registration and following up with registration of the shares thus sold, a company can avoid the bloodletting pain of registration costs being drawn from regular cash flow.
Unlike the conventional IPO, this Sensible Grass-Roots Public Listing process allows your company to raise necessary expansion funds in short order, rather than awaiting approval of regulators in DC and the various states.
Now, given the passage of the JOBS-Act of 2012, we have the legal privilege to perform Limited General Solicitation in Private Placement and to accept share purchase investments from average people, meaning ALL of your customers. This means that the pool of potential investors in a smaller private enterprise, whether start-up or long-lived has grown in the USA from just a few million to include the entire adult population.
In a Cost-Effective 'Grass-Roots' based offering, only your committed, consumer advocate investors will initially hold shares in the public float. This class of investors usually has long-term objectives and is likely to hold shares for an extended time-frame. As a result, the initial selling of shares on a public exchange, should the company choose to enlist upon one, is likely to be limited and market activity of your company's shares stands to be favorable. This is a result of a small supply versus a growing demand for your shares and likely results in higher prices.
As we generate interest in your shares through effective Investor Relations Programs, it is wise to utilize your registration statement to conduct a Secondary or 'Follow-On' Offering of more new-issue shares to the general public through a syndicate of our broker/dealer associates. More firms with clients holding your shares translates to greater market-making participation by a wide spectrum of the brokerage community and a more stable market for your shares.
Your company’s likely eventual goal following grass-roots success is a move from private capital to junior exchanges like the OTCBB to a major national or international exchange thusly inviting institutional investment and the participation of Wall Street and Fleet Street level banking firms.
More often than not, the path of grassroots corporate finance includes rounds of SCOR, Private Placement, and SB-2 or Sensible Grass-Roots Public Listing with an end goal of Major Market Listing. In this way, after a low-risk first round, corporate finance is self-supporting and corporate governance is given time to form around best practices, and knowledgeable compliance with securities regulations.
Reasoned Pursuit of Corporate Finance
Raising hard cash for growth is often a challenging process. Only folks who are truly committed to the undertaking will enjoy real success. Listening and learning from one's expert counsel, such as we at Sirius, is the primary ingredient in taking control of a well reasoned approach to the process of Corporate Finance. Your business is your business, not the business of corporate finance and securities regulations.
Once you have decided to become a Publicly Held Entity you must take into consideration: regulatory compliance, efficient tracking and use of capital, well-governed decision making, record keeping, disclosure, corporate communications, media relations, and growth of shareholder equity. If you assimilate these precepts as part of your daily corporate culture, you will enjoy a long and fruitful relationship with the investing public and all those involved with your venture will come to benefit. You will be able continuously to find new money for as long as you desire.
In having a publicly trading share issue with a consistently rising value, you will have the advantage of using capital shares rather than cash for acquisition and business combination, thus growing in assets and feeding a living enterprise. Your company will not depend upon any one set of brokers, vulture capitalists, angel-devils, or institutions. You will be set free to steer your own course as the visionary you remember being when first you began.
Sirius is prepared to guide you, swiftly and safely to proper and plentiful funding for your business. Give Mr Sharma a call and he will answer all of your questions.
All things being equal, with support from a hundred or more of your loyal consumers it's not so difficult to raise $1M-$15M to accelerate your success while respectably valuing your prior sweat. Select the next tab above to learn how it is done.
