Quantum Partners LLC

What does Public Company Mean?

• A company that has issued securities through an initial public offering (IPO) and is traded on at least one stock exchange or in the over the counter market. Although a small percentage of shares may be initially "floated" to the public, the act of becoming a public company allows the market to determine the value of the entire company through daily trading.
• Public companies must meet stringent reporting requirements set out by the Securities and Exchange Commission (SEC), including the public disclosure of financial statements and annual 10-k reports discussing the state of the company. Each stock exchange also has specific financial and reporting guidelines that govern whether a stock is allowed to be listed for trading.
• Public companies have inherent advantages over private companies, including the ability to sell future equity stakes and increased access to the debt markets. With these advantages, however, comes increased regulatory scrutiny and less control for majority owners and company founders. Once a company goes public, it has to answer to its shareholders.

Why Go Public

Like most decisions, taking your company public has advantages and disadvantages. Some of the advantages include liquidity for you and the other stockholders, access to the public equity markets, and prestige. Some of the disadvantages include the costs, liabilities and public oversight of your company.

Going Public Advantages

• Access to Capital
• Liquidity
• Compensation
• Prestige
• Image
• Publicity
• Mergers & Acquisitions
• Exit Strategy
• Future Capital

Going Public Disadvantages

• Profit-sharing
• Loss of Confidentiality
• Reporting and Fiduciary Responsibilities
• Loss of Control
• IPO Expenses
• Immediate Cash-out Usually Not Permitted
• Liability