How to Go Public

In an initial public offering (IPO), you go public by selling shares of your company.

Difficulty: Easy

Instructions

1. Select an accountant, attorney and underwriter to help you take the company public. Seek an underwriter who will make a "firm commitment"; that is, agree to buy all shares not sold in the public offering.

2. Get the team together with your officers and directors to discuss goals, underwriting terms, schedules and other details.

3. Start work on a preliminary draft of the prospectus - also called a red herring - and related Securities and Exchange Commission documents.

4. Bring in an independent auditor to audit your financial records.

5. Have the attorney and others on the team ensure the prospectus complies with SEC regulations. You likely will go through several drafts before the SEC approves the document.

6. File the prospectus with the SEC and pay filing fees.

7. File required state and National Association of Securities Dealers documents.

8. Print the red herring and distribute it to prospective investors.

9. Correspond with SEC regarding its questions, comments and concerns about the prospectus. Make corrections and changes as required.

10. Sign a final agreement with the undewriter.

11. Establish an escrow account in which to deposit money that will be distributed at closing.

12. Print the final prospectus and distribute it to prospective investors. Also have stock certificates printed.

13. Run tombstone ads, announcing the offering.

14. Price and close the offering.

Tips & Warnings

• While the IPO is in registration, you are expected to avoid publicity that could be construed as a sales effort. The registration period generally runs from the date you reach a tentative agreement with the underwriter until several weeks after the offering closes.

Who Can Help:

• eFax is the world’s #1 Internet fax service.  Send and receive faxes by email and kiss your fax machine goodbye. 30-Day Free Trial