Is It Viable That A Small Business Can Go Public?

I find it to be a common belief in the small business community that small businesses can't go public until they have significant revenues, say something on the order of $10 to $20 million a year.

This is totally wrong.

I have been taking Small Businesses and Introduced companies public as a consultant for over 15 years now. And for 15 years I have been frequently asked in various ways " Can a small business similar to ours increase capital by going public? We just have a million dollars in revenue. Aren't we quite small?"

The reply has been and still is "Yes, you can go public. And no, you are not very small."

What is very small?

Fine actually nothing. An organization who is bringing in one million in revenues would be no issue to take public. But it is actually not relating to your revenues, it is about your business notions. If you are working on a development stage business plan and you are achieving success, then we can possibly take you public with that alone. If you are making five, ten or twenty thousand every month that is useful because it just indicates that you are implementing on your business plan.

It has become harder and harder to take a company public with no revenue and no business plans since the SEC and FINRA are rightfully trying to eliminate micro cap fraud, but yes it can still be done. If you have no revenues, although, you will need to have patience, some money in the bank to warranty you can live for some years, and you will have to be making genuine development on your business plan to show the powers that be that you are a "true" company and not simply a "sham" set up for micro-cap scam.

If you are a small business and you don't plan to be mom-and-pop forever, then "Going Public" is something you must look into in the quite early stages. "Public" money is normally a lot cheaper than "private" money.

I have seen private companies who feel they are too small to "go public" give up half of their company for a small six figure investment. Sometimes companies with revenues in the millions feel they are too small and taking the business capital route they increase ten or twenty million but finish with just five to six percent of the company in a few years.

This type of dilution is entirely pointless. The same amount of money could be increased by going public while sustaining 60-65% ownership

Of course there are downsides to going public early also, but many of those have to do with being preyed upon by non-professionals, fraudsters, and others who really don't know what they are doing. If you check out your advisers and get suggestion and structuring and referrals from professionals who know what they are doing, you can reduce many problems of going public early.

And if you feel you are potentially the next EBay or Google or Microsoft sort of company, going public early on without venture capitalist might be worth billions and billions of dollars.

Bill Gates just owns nearly fourteen percent of Microsoft. Just think how rich he would be if he owned sixty percent!

Now after the "Can I really go public?" type of queries the next set of questions I generally get are "How do I raise capital when I go public? Do I do a merger reverse? " or " I see ads that say - Buy reverse merger shell - must I do that? " But those are questions for another article. Stay Tuned.

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