An IPO is a big deal – and not just for the company that’s planning to go public. You see, when you list your company on a public exchange, you create secondary market demand and increase your company’s visibility. You are also exposing your company to a lot more scrutiny than before, which means the process of preparing an IPO takes time and careful planning.
We have consulted the experts from the VStock Transfer – a company that helps you navigate through the IPO process – to provide you with more information about this process.
In this post, we will take a look at the rigorous process of becoming publicly-traded, based on the information we have obtained from the company VStock Transfer.
The Role of an IPO in a Company’s Growth and Success
The main function of an IPO is to raise capital for your company. Unlike an acquisition or an acquisition of stock, an IPO is a sale of shares of your company’s stock to the general public. It is the process of trading your company’s stock on a stock exchange, which is a regulated venue where investors can buy and sell shares of your company’s stock.
When your company goes public it gains new investors and boosts the value of your company’s shares. You can raise anywhere between $50 million and $300 million through any given IPO. And depending on the demand, you can see a valuation increase of between 10% and 50%. There are many factors that impact the success of an IPO, including the strength of your company’s business, your company’s competitive advantage, and the general market situation at the time the IPO is going to take place. The most important factor that determines the success of an IPO is the quality of your company’s business during the time of the IPO.
VStock Transfer is working with you to guide you through every step of the IPO process. VStock Transfer provides the following services:
- Make sure your securities are eligible for DRS by participating in The Depository Trust Company’s Fast Automated Securities Transfer (FAST).
- Work closely with your team, counsel, underwriters, and underwriters’ counsel.
- Give issuers and shareholders 24/7 access to shareholder records online with tools for filtering.
- Assisting shareholders with their questions and requests before and after an IPO.
- Establish a register of outstanding Common Stock as well as Common Stock to be issued in the IPO.
- Secure, private access to shareholder data for issuers.
- Prepare and send letters of transmittal to all stockholders.
- Reissue post IPO stock certificates for all outstanding Common Stock.
- Convert outstanding warrants and notes into Common Stock certificates, as necessary.
- Removal of legends and legend attachments (for example, when an IPO lock-up is imposed).
Is your company ready for an IPO?
Assuming an IPO is absolutely essential for the growth of your company. But it must also be said that it is a very demanding process. Before you enter the IPO process, you should ask yourself if your company is ready for it. There are many indicators you could look at to determine if your company is ready for an IPO. Experts from VStock Transfer point out that some of these indicators include:
- Does your company have a strong business model? Can investors see a clear and profitable future for your company?
- Does your company have a proven track record? More importantly, has it been operating for a long enough time period to show a profit?
- Does your company have strong leadership? Is the CEO of your company qualified to be a public figure?
- Is your company being backed by a reliable investor? If not, what are the risks of the company being held back by the investors?
More about their services, you can find on their channel on YouTube.
How to go about raising capital through an IPO
According to experts from VStock Transfer, you can raise capital through IPO, by following these steps:
- Determine the amount you would like to raise. The amount you decide to raise will be the number of shares you are willing to sell to investors.
- Research potential IPO markets to determine the amount of shares per share you can sell in a specific market. You can conduct research by looking at the size of shares being traded on a particular exchange and the volumes of trading that take place on that exchange.
- Contact brokers or buy-side investors to determine the amount of shares they are willing to buy at a given price. You can do this by contacting bankers and investors directly or by using a broker.
- Finalize the order form and get it approved. You can finalize your order form through the broker’s trading platform or by using a written order form.
- Have the order form approved and executed. You can have the order form approved and executed by the broker on your behalf.
- Deliver and receive the shares.
- Keep track of your share ownership and report any changes to the IRS.
After Completing a Successful IPO
Once you have completed a successful IPO, VStock Transfer will continue to provide ongoing services such as:
- Stockholder accounts maintenance, including new accounts, account consolidation, and escheatment.
- Prompt response to stockholder correspondence, email, and calls.
- For inquiries from investors and brokers, there is a toll-free number.
- Records are stored in accordance with SEC guidelines.
- Replacement of lost or stolen stock certificates.
- Creation of book entry DRS positions (if necessary).
- Maintenance of outstanding share records.
- Response to audit requests in a timely manner.
Conclusion
IPOs are a huge deal for a company and its shareholders. By going public, a company can raise funds by selling shares of stock to the general public. This is commonly referred to as an IPO. The process of going public can be quite challenging, but it can also be very rewarding. Experts from VStock Transfer will be glad to guide you through the IPO process. For more information, contact them through Facebook.