Question

In case of IPO, what is the impact on a small family business public view, what's the best public financing alternatives?? what's is the financial reporting effects??

Answer 1

The IPO provides shareholders and management of a companh with a significant sense of accomplishment and represents one of the most important milestones in the corporate evolution of a company, for its owners, management, employees and other stakeholders.

An IPO can raise the capital needed to accelerate growth and achieve market leadership. An ipo is the firat sale of a company's shares to the public amd the listing of shares on a stock exchange. It allows company to raise capital in order to build its business by creating and selling new shares.

Family firms are a crucial part of our economy, their survival depends on the availability of financial resources and an IPO offers tbe potential to raise financial resources while maintaing family control. A better understanding of family firm IPOs might convince more family members to consider an IPO and more non family investors to invest in family firms. II this context, it is important to understand the golas of both family members and non family investors in order to reconcile potentially diverging goals.

Many companies that pursue IPOs donot public, at least not intially.

Your alternatives may include any combination of the following:

1. Sale to a strategic buyer through the M&A market.

2. Sale to a private equity firm

3. Private placement, often as a pre IPO step

4. Joint ventures and strategic alliances

5. Refinancing to release funds for partial exit.

The process of going public through an ipo is time consuming, expensive and a draim on executive time and talent. An alternative is a reverse merger in which a privately held company acquires a controlling intrest in a publicly traded company that is dormant or nearly so and usually has few

Some of the key financial reporting issues that entities should consider in the IPO process include:

1. Corporate restructures

2. Transaction costs

3. General purpose financial report requirements

4. Half year reporting requirements.

5. Share based payments.

6. Earnings per share and segment reporting

7. Income tax considerations

8. Other reporting considerations.

There are many reasons for a family business to go public. The primary ones are enhanced exit strategies for family members and business partners, greater access to capital markets and enhanced opportunities in executive recruitment and retention. A reverse merger provides a vehicle that is quicker and less expensive than an IPO