Public companies advantages

The main reason private companies go public is to create significant long-term wealth for their investors and management. Public companies are typically valued at more than twice their own private company valuation. Management teams who understand that being publicly listed can be a fantastic tool to raise capital, recruit, retain and reward key talent, complete acquisitions and gain more industry attention; are typically best at maximizing shareholder value and creating significant long-term wealth.

Public companies are able to complete acquisitions more easily since they can use stock in lieu of cash consideration, can raise debt or equity financing quickly, can close acquisitions faster and often have a higher level of credibility in the eye of target company management and their investors.

Public companies can offer management, key personnel and other employees shares and stock options, which are incredibly effective at attracting, retaining and rewarding key employees and partners.

Public companies can tap into a larger pool of potential investment capital. Most investors prefer investing in public companies because they provide regular financial statements, update shareholders on material events and offer higher levels of investment liquidity with very low transaction cost.

Public companies and their key management tend to secure more media coverage for press release and interviews and are generally viewed as being more credible participants in their industry.

One of the main reasons private companies seek a public listing is to provide their existing and future shareholders with a market by which they can sell, or buy, shares.

Business risk is reduced since public companies can more quickly and easily raise capital, complete trans-formative business transactions and recruit top talent, even when plans haven’t developed as originally anticipated whereas this often isn’t possible as a private company.