6 1. SELECT THE RIGHT MARKET 2. CHOOSE A LISTING METHOD 3. SUBMIT LISTING APPLICATION 4. COMPILE & FILE DOCUMENTATION RECEIVE CONFIRMATION OF RECEIPT OF APPLICATION 6. RECEIVE CONDITIONAL APPROVAL 7. RECEIVE APPROVAL 8. SECURITIES LISTED&POSTEDFORTRADING 5. Deciding to go public Your company’s readiness to enter the market is only one factor to take into account in deciding whether to go public. While there are many advantages to taking your company public, there are also many issues to consider when making a final decision. ISSUES TO CONSIDER Public ownership The owners and founders of your company must consider howmuch control they want to retain. When a company goes public, a reasonable percentage of shares must be publicly owned and tradable. Performance & Meeting milestones Public shareholders making an investment in your company will monitor management’s performance and your company’s track record of meeting milestones. They are relying on your company to grow their investment and will hold you accountable for the objectives you set. Transparency Your management team needs to be prepared for changes in culture, operations, reporting, etc. that come with being a public entity. They will be accountable to shareholders, who will own a significant portion of the company and whose questions and opinions must be heard and considered. In addition, the management team’s decisions can become a matter of public record and regulatory scrutiny. Those decisions must be seen as fair and in the best interest of the company and its stakeholders. Extra responsibilities Going public will increase your Board of Directors’ responsibilities to the investment community, in particular with regard to the amount and type of information they will be expected to provide on a regular basis. They will need to be prepared to meet requirements in the Corporate Governance and Disclosure Guidelines set by regulatory bodies, such as the provincial securities commissions, and by the Exchanges. Share restrictions When a company goes public, it may be required to have some securities in escrow, meaning they cannot be sold for a certain length of time. Costs The cost to raise capital in the public markets includes advisor and professional fees, investment banking commissions, original listing fees and ongoing fees to maintain a public disclosure record. These should be carefully considered and compared to the cost of other financing options available to private companies. (For more details on costs and fees, see Chapter 9.) Your path to going public The decision to go public… Must be explored from every angle by a company’s owners, financial advisors and legal counsel.
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