IPO and company size

[giladsof]

What limitations are there on a company before it can go public? Can a startup of one person do an IPO?

 

[Lee Shepherd]

What limitations are there on a company before it can go public? Can a startup of one person do an IPO?

Hi giladsof,

Welcome to the forums. You've asked a good question but to be brutally honest with you here, you are not ready to float your company/business. You would be asking your legal team and not an internet forum (with respect). An IPO (Initial Public Offering) is purely to raise capital for your company. And in short answer to your question, No, 1 person cannot float their company.

Assuming this is a UK float related question then your company would be expected to have many millions under its belt - ie, worth £50m plus.

If you are a smaller business/company looking to raise funds then you can of course take other avenues such as (similar but not quite the same) selling off shares. This would mean selling part of your business in exchange for funds of what you expect your company to exceed or be (typically) worth at the time of the sale.

Dragons den is a good example here on how one would value their business but yet the investor values it differently. If you are prepared to sell off part of your business, expect there to be issues with control, input of investor/s (good or bad intentions/direction) and the funds you would potentially receive and how they are allocated.

In short there is a lot of work to be considered for an IPO and this can take several months, in some cases years to successfully float. Legal bodies, solicitors and bankers are always also involved which soak up a lot of time let alone money.

If you are a small business, and I'm going to assume that you are, looking to raise capital, then a bank loan, business loan or fund and buy back option would be your best route.

Lee

 

[EnlightenedJoe]

What caused this need to go IPO ? Has your latest research produced a perfect winning system going back 30 years of historical data ?

 

[giladsof]

So I learn that every stock publicly traded is of a company worth that was worth a few millions at the day of the IPO.

Does that mean that all penny stocks were once worth more, at least at the day of the IPO and later declined in value?

 

[Quantt]

So I learn that every stock publicly traded is of a company worth that was worth a few millions at the day of the IPO.

Does that mean that all penny stocks were once worth more, at least at the day of the IPO and later declined in value?

A lot of the penny stocks are traded over the counter - which is another shady place altogether - just read Wolf of Wall Street...

 

[Merk Porter]

IPO, i.e. initial public offering is a process applied in the equity market whereby a private company changes its status by raising the capital by issuing primary shares to the new stockholders of the company. In IPO a company turns into public limited company by increasing its equity holders and raise money from them which the company will employ to further increase its business. And it is not a loan, rather a legal process to expand the business.