The Importance of Knowing a Company's Market Cap before Investing in It

1. How Do You Know When Your Business Is Ready For An Initial Public Offering? When Is It Time To Launch An IPO? One of the most exciting moments in the life of any company is when it launches an IPO. That stands for an "initial public offering" and it basically means the first time that a company begins to trade stock on a public stock market. Before reaching this pivotal moment one should consult with a startup lawyer to figure out the right time to launch into public markets. A Record Of Success One of the first things that a business lawyer is bound to tell you is that your company must prove that it is successful. The best way to do this is to have a firm grip on your financial numbers. You should be able to prove to your startup lawyer and to the public at large that you are running a profit business with every likelihood that the profits will continue into the future. One area of particular important to any startup is the gross margin on every dollar spent. Investors like to see nice fat margins on the business that they invest in. This of course just means what percent of money that customers spent is actual

2. profit for the company. The higher the margin, the more profitable a startup will be. Have A Compelling Story Any business attorney worth his or her salt will advise you that before you submit paperwork for an IPO you should make sure your company has a great story to tell. Investors like to put their money into companies that they have a certain vision of. When someone says "Facebook" we know what that company looks like. They have a great story and we might even want to invest in them. If your company does not also have some type of story to tell, then you need to talk with your business attorney to figure out what can be done about this. Do You Need The Public Funding? A question to ask a business lawyer as well as your own accounting team is what other options are available to you. Going to the public markets to sell stock is just one of many ways to raise the funds your company needs to expand its operations. Private investors can sometimes provide the funds that one needs to expand operations or get through a tough spot. This may be a better solution for some because going to public is expensive and there is no guarantee that it will work out the way that you hope.

3. The moment that a company goes public it has to submit to regulations put in place by the Securities and Exchange Commission (SEC). Those are burdens not put on privately held companies. Investors have a right to know what is going on with the companies that they purchase stock in. As a result, a company that is debating going public should consider how much they want to have to submit to regulation. Observing The Appetite Of The Market The final consideration for a person thinking about an initial public offering is how much of an appetite the market seems to have for this type of product. This is important because if the market is not wanting to invest in new ventures at the moment, you can expect almost instant failure of your public offering. Judging the appetite of the market is a bit of an art and a science. It make take some time to learn how to get it right, but make sure you do before you go public. For more information consult with the experts at CL King & Associates. CL King has worked as a Co-Manager for Bond Offering, Subordinated Notes Offering, Notes Offering and many more for the reputed firms such as Citigroup, Walmart, AT&T’s etc. We transact directly in the capital markets on behalf of corporations through our Corporate Services business focused on share repurchase and continuous share offerings ("ATMs"). To find more details, please visit here: http://www.clking.com/