Legal Counsel For Initial Public Offerings
Regardless of market conditions, companies will always seek to scale by accessing capital markets and going public in the U.S. No matter how a company goes public, the process is highly regulated and, without experienced advisers, can be difficult, expensive and time-consuming.
In an IPO process, a company must navigate the Securities and Exchange Commission (SEC) and federal securities laws, the rules and regulations of their chosen national exchange (generally Nasdaq or the NYSE), as well as be aware of the rules and regulations governing their underwriter (FINRA). Not only are the rules constantly evolving, but their interpretation, both formally through written guidance and informally through practice, is constantly shifting and changing. Proper legal representation in an initial public offering requires a specialized focus. The attorneys at Anthony L.G., PLLC, have the technical experience, knowledge and skills necessary to assist companies in their efforts to go public. We work diligently on behalf of our clients to get the job done.
Understanding The IPO Process
Certainly, most people know that an IPO involves the filing of a registration statement with the SEC, but that is just one part of the entire process. From a high level, an IPO requires:
- Gather your team. In addition to legal counsel, a company will need an underwriter/investment banker, a qualified public company accountant (either internal or external), an independent public auditor, a transfer agent, an EDGAR agent and a dedicated internal team to work alongside the external team to complete the process.
- Get organized. Most companies require a corporate clean-up, whether it is a minor or complete restructuring. Corporate clean-up includes creating holding companies, changing states or countries of domicile for the corporate entities, amending charter documents such as articles of incorporation and bylaws, creating employee stock option plans, entering into employment agreements, entering into intercompany agreements and filling out a board of directors.
- Get to Work. The real work begins early in the process and includes obtaining audited financial statements and drafting your registration statement. We work hand in hand with your accounting team and internal team to complete a draft of the registration statement early on so that it can be filed right after the audit is completed. Building out a registration statement involves telling your story – and we help you tell the best story you can.
- Pick and Exchange and Apply. Whether your company wants to list on the Nasdaq or the NYSE/NYSE American, we prepare and submit the application on your behalf. We can also help guide your decision on which exchange is the best fit for your company. The exchange application process involves a review and comment period, and we are there to help you through it.
- The SEC Process. Once your initial registration statement is filed with the SEC, you will go through a comment and review period. It doesn’t have to be scary – we do it every day!
- The Underwriter. Throughout your entire IPO process, your underwriter will be completing extensive due diligence. We help answer their questions and guide you towards efficient organization. Your underwriter must also have its compensation approved by FINRA (a 5150 process). We help you understand that process. Finally, we help negotiate your final underwriting agreement, including officer, director and control shareholder lock-ups.
- The Roadshow. Every public offering involves a marketing period or roadshow. We help ensure that the marketing materials and process comply with federal securities laws.
- Closing the IPO. The closing process for the IPO involves coordinating with the exchange, your transfer agent, DTC and underwriter to ensure that all funds are properly distributed, and your securities begin to trade. We know how to close the deal!
Why Go Public?
The advantages of an IPO include:
- Access to capital including the ability to raise capital for a diverse group of investors
- Lower cost of capital than for private companies
- Exit for founders, entrepreneurs and early-stage investors
- Public image and prestige
- Ability to attract and retain better personnel and provide executives with stock compensation
The disadvantages of an IPO include:
- Expense – both of the initial transaction and ongoing compliance
- Public disclosure of business information – public companies are required to be transparent which can give private competitors an edge
- Pressure from activist investors affecting strategy and long-term goals
- Civil and criminal liability of executive officers and directors
- Takeover danger
Get Experienced Guidance For Going Public Today
Going public will take considerable time, effort and money. The process can be long, confusing and complicated. That is why you will need lawyers who are highly skilled in securities law and understand the technicalities of the process and the implications of your decisions.