How to Place a Stock Up for Public Offering

Hopefully your stock will do this.

A public offering (also referred to as an Initial Public Offering, or IPO) is typically done in order for a company to raise capital without incurring debt. Instead of producing a product or providing a service in exchange for money, the company "prints" shares of itself that investors can buy. The company can use the proceeds to run operations, and the shareholders hope that the value of their shares will increase over time.

Instructions

1. 

   Contact an investment bank. The bank will act as an underwriter for the stock offering if your company meets their requirements. Potential investors will be contacted by the bank to sell your shares. After the initial public offering, your shares will be listed on a stock exchange to be traded on the open market.

2. Hire a law firm. There are many requirements and guidelines involved in offering stock to the public. Your company will need a law firm that has a solid background in the securities business to make sure you don't jeopardize your standing with the SEC.

3. 

   Chose a method. The bank will advise you on what form of offering to make. Some of the choices are as follows: Dutch Auction, Firm Commitment, Best Efforts, Bought Deal and Self Distribution of Stock. You and the bank will decide which is best, taking into consideration the size of your company and what field you are in.

4. 

   Take care of your shareholders. After the stock is issued, you will need to provide a quarterly financial report and keep the public up to date on the status of stock prices, total number of shares, insider transactions and many other things. The bankers and lawyers will guide you through the complex details.

Tips & Warnings

• Sometimes the cheapest form of offering will not bring in the most capital. Choose your method wisely.

• Once your shares are sold, you open yourself up to the possibility of discontented shareholders.