If you’re reading this you are most likely contemplating the possibility of going public or taking your public company global for distribution expansion. While your intentions may be in the right place your company may not be in a position for these types of growth.
Let’s look at going public. I get calls daily from companies and startups with products ranging from a new shoelace that is going to revolutionize the sneaker industry to underwater gimp costume sowing instructional videos and sometimes, I mean very rarely will I get a cold call from a client that will actually succeed in going public and sustaining a public entity post IPO. Unless you have profits, limited liability and real distribution and scalability, you have nothing at all. Ideas come and go and very few concepts are so revolutionary that they can Google-ize and industry.
Your industry is actually secondary but the reality is that it should be as ‘recession proof’ as possible. I know what you’re thinking, nothing is recession proof and yes you are partially correct. But your corporation should still be able to operate during a recession and still bring in, no matter how slim, profits during hard times. This is how you will be able to bring in securities back PIPE loans and LOC’s when your stock is trading in minimal volume. I could go on about this point for pages upon pages but I only have 400 words to get my point across so I’ll move on.
Globalization is an endeavor that should only be taken on once you’ve conquered your own backyard. When you’ve truly dominated your competition in one region you should facilitate and supplement your growth by using your public stock as collateral for controlled liquidation if you go delinquent. Don’t liquidate shares onto the market in order to raise capital for that expansion to China or Japan. Your company should be able to use is liquid proceeds above and beyond operational costs for this growth and at a worst case you would collateralize assets or securities to come up with the rest of the cash needed.
Most companies that see greener pastures in another country are still two years too early for the expansion. Get an opinion from your corporate and legal advisors then go to your board, bring it to a vote then if the expansion is approved you should bring on a consultant to iron out the kinks and use their contact base to help you grow with as few bumps in the road as possible.
At the end of the day you should bring on the right people who are completely submerged in the IPO and globalization industry to help guide you during the above processes. If you feel you are ready have a meeting with your C level group of executives and write down the pros and cons for going public or expanding and if the pros out weight the cons, find yourself a turnkey consulting firm and take it from there.
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