Going public can be a defining moment for your organization, accelerating its growth potential and strengthening its reputation. But it may not be the right solution for your company. Learn more - http://gt-us.co/1EoG4to

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ALTERNATIVES
TO AN IPO

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Is going public
right for your company?
Maybe.
Going public can be a defining
moment for an organization,
accelerating growth potential
and strengthening reputation.
2

3. © Grant Thornton LLP. All rights reserved.
Is going public
right for your company?
3
✔ Compliance and reporting
✔ Investor pressure
But maybe not,
because of increased…
✔ Legal risk
✔ Competition for talent

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Get the full report
Is going public
right for your company?

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There may be a
better way.

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Alternatives to an IPO
Exempt offerings
These offerings are exempt from SEC registration, and include smaller securities
offerings under Regulation A and Regulation D, Rule 144A private placements,
including both equity and debt offerings.
Advantages
• Capital markets can be accessed without costs of SEC
registration and ongoing periodic filings.
• The Jumpstart Our Business Startups (JOBS) Act has removed
some traditional roadblocks to executing exempt offerings.
Disadvantages
• In most cases, a company can raise more capital through an
IPO than an exempt offering.
• In many types of exempt offerings, securities may be sold only to
qualified buyers, limiting the pool of potential investors.
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Alternatives to an IPO
Crowdfunding
An emerging means of raising capital by obtaining a series of smaller investments
from a large number of people, typically through the use of social media.
Advantages
• Entrepreneurial companies can raise capital that traditional
investors or lenders are unwilling to provide.
• Can be less costly.
Disadvantages
• The JOBS Act established the regulatory foundation for
crowdfunding's equity model, but companies may not offer or sell
securities until the SEC adopts final rules.
• Final SEC rules are likely to significantly limit capital that can be
raised each year through crowdfunding.
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Alternatives to an IPO
Secondary market transactions
Private transactions that allow investors/employees to liquidate their stock holdings
to qualified investors.
Advantages
• Original shareholders or option holders can monetize some or all
of their holdings.
Disadvantages
• This alternative is available only to certain well-known private
companies.
• This is not a means to raise capital for the business itself.
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Alternatives to an IPO
Debt financing
Involves borrowing money from a financial institution or via private financing.
Advantages
• The equity owners' interests in the company are not diluted.
• The after-tax cost of borrowing funds can be less than issuing
equity securities, mainly because interest expense is deductible.
Disadvantages
• It imposes an obligation on a company to make periodic
payments of principal and interest.
• It can constrain future growth if a company becomes "too
leveraged."
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10. 10
Is going public right
for your company?
Every business must reach its own
conclusion, in consultation with
financial, legal and accounting
advisors.

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