What does it cost to go public?

To become an SEC reporting issuer, a company must have audited financial statements with footnotes. Costs vary based on the size, complexity and age of business. Fees typically range from $10,000 to more than $80,000 for companies generating a few million in revenue. However, these fees can also be significantly higher when engaging a "big four" audit firm.

Once a company becomes an SEC reporting issuer, it must file three quarterly financial statements that are reviewed by an auditor and one annual report that is audited. Ongoing costs also vary based on the size and complexity of the business. Our clients typically spend between $50,000 to $100,000 per year on accounting and audit related expenses.

To become an SEC reporting issuer, a company must provide certain information to comply with state and federal rules. For example, a company must disclose details about their business, products/services, officers/directors, risks, strategic plans and historical financial results - all information that an ordinary investor should know before making an investment decision.

Legal fees vary based on many factors including the size and complexity of business going public, who their professional advisors are and how the private company plans to go public (e.g., direct listing, reverse merger, initial public offering). Legal fees typically start at $50,000 to $75,000 for direct listings or reverse mergers and can be $250,000+ for initial public offerings.

Once a company becomes an SEC reporting issuer, it must file three quarterly reports, one annual report, disclosure statements regarding material events and various other filings. Our typical client completing a direct listing spends about $30,000 to $50,000 per annum on basic public company related expenses, while companies that are actively engaged in debt or equity financings, mergers/acquisitions or other material activities will incur higher legal expenses.

When a company goes public, it will need to incur stock exchange listing fees, federal and state filing fees, document preparation fees, press release services, transfer agent fees and other expenses. These fees are typically about $50,000. Once publicly listed, these fees are typically about $30,000 per year. Companies listing on NASDAQ or NYSE will have significantly higher initial and ongoing expenses.

We generally represent entrepreneurs for a combination of cash paid on milestones plus common shares. The amount and form of compensation is based on our analysis of the value we anticipate creating for the entrepreneur and their business, our risk profile and other factors. In most cases, we're able and willing to partner with our clients and work with them for a fee paid entirely in equity.

Most companies can complete a direct listing or direct public offering for about $200,000 to $400,000 in cash expenses, plus shares of common stock. Large, complex or foreign companies will generally incur higher costs of accounting, audit and legal services.

Companies that go public through an initial public offering will have additional costs for underwriter commissions, underwriter legal counsel, director and officer liability insurance, senior stock exchange listing fees and other expenses. We generally advise clients to allocate up to $800,000 for fees that must be paid prior to their IPO, and structure the remaining fees to be deducted from capital raised.

Note that most entrepreneurs jump-start the going public process with less than $50,000 out of pocket and then complete a private placement so their friends, family and supporters can purchase "pre-IPO" shares while raising all the capital necessary to pay for the remaining going-public expenses!

We take companies public through a direct listing in the United States so entrepreneurs can acquire private companies, raise capital, attract the best talent, close more deals and significantly increase their valuation. Learn more.