Going public allows a company’s employees to share in its growth and success through stock options and other equity-based compensation structures that benefit from a more liquid stock with an independently determined fair market value. A public company may also use its equity to attract and retain management and key personnel.
What are disadvantages of going public?
The IPO process is expensive. The legal, accounting and printing costs are significant and these costs will have to be paid regardless of whether an IPO is successful.
Once an IPO is completed, a company will continue to incur higher costs as a public company, including the significant compliance requirements of the Sarbanes-Oxley Act of
2002 (“Sarbanes-Oxley”) and the Dodd-FrankWall Street Reform and Consumer Protection
Act of 2010 (“Dodd-Frank”).
There is much more public scrutiny of a company after an IPO. Once a company is public, certain information must be disclosed, such as compensation, financial information and material agreements.
How does the JOBS Act change the IPO process?
Since at least the dotcom bust of the early 2000s and accelerating after the passages of Sarbanes-Oxley andDodd-Frank, business leaders and commentators have observed that the regulatory requirements to be met in order to finance companies in the United States have become overly burdensome and discourage entrepreneurship. In the aftermath of the financial crisis
Going public allows a company’s employees to share in its growth and success through stock options and other equity-based compensation structures that benefit from a more liquid stock with an independently determined fair market value. A public company may also use its equity to attract and retain management and key personnel.
What are disadvantages of going public?
The IPO process is expensive. The legal, accounting and printing costs are significant and these costs will have to be paid regardless of whether an IPO is successful.
Once an IPO is completed, a company will continue to incur higher costs as a public company, including the significant compliance requirements of the Sarbanes-Oxley Act of
2002 (“Sarbanes-Oxley”) and the Dodd-FrankWall Street Reform and Consumer Protection
Act of 2010 (“Dodd-Frank”).
There is much more public scrutiny of a company after an IPO. Once a company is public, certain information must be disclosed, such as compensation, financial information and material agreements.
How does the JOBS Act change the IPO process?
Since at least the dotcom bust of the early 2000s and accelerating after the passages of Sarbanes-Oxley andDodd-Frank, business leaders and commentators have observed that the regulatory requirements to be met in order to finance companies in the United States have become overly burdensome and discourage entrepreneurship. In the aftermath of the financial crisis
