A common question from companies considering an Initial Public Offering (IPO) is: what will be the cost?
The function and expectations of a board of directors can change significantly when a company decides to bring in external investors, for example through venture capital or an initial public offering (IPO).
Companies preparing for an Initial Public Offer (IPO) often take the opportunity to incentivise directors and employees through the issue of shares (or options to acquire shares), either as a once-off event or, more often, as part of an ongoing incentive programme. Not infrequently, the design and implementation of such a plan are amongst the last matters to be addressed.
Pursuing an IPO is a significant step in the life of any company. The listing process can be costly and disruptive and, once listed, the business is subject to an increased level of reporting requirements and public scrutiny, as well as pressure from shareholders to meet earnings and dividend forecasts and maintain a rising share price.
The allure of going public is ever present in the minds of firm owners. However, family business owners who are seriously contemplating going public need to weigh up the advantages and disadvantages of listing on the Australian Stock Exchange.
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