| Advantage of Being Public | | | | sheet. · |
| Corporate Funding & Turnaround Strategies Add | | | | An equity offering from a lender’s perspective |
| comments | | | | strengthens the financial condition of the company |
| A public offering of company stock will improve the | | | | (reduces leverage). · |
| company’s net worth, enabling the company to | | | | Future financing may be obtained more easily since |
| obtain capital or borrow money on more favorable | | | | the company can offer investors a security that is |
| terms. · | | | | liquid, more freely tradable, with an ascertainable |
| A public company can more easily expand through | | | | market value. · |
| acquisitions, using its own stock rather than depleting | | | | Liquidity for the owners of the company, including |
| needed cash. · | | | | founders, venture capital and other professional |
| The company may be better able to attract and retain | | | | investors, can be achieved under Rule 144 |
| more highly qualified personnel by offering stock | | | | Taking a company public may enable the company to |
| options, bonuses, or other incentives involving company | | | | eliminate existing personal guarantees to lenders and |
| stock with an ascertainable market value. · | | | | others and generally allow the company to avoid any |
| Through public ownership of its securities, the company | | | | future personal guarantees. · |
| may be in a position to gain prestige, become better | | | | Establishing a public market for the stock usually allows |
| known nationally, and improve its business operations. | | | | the founders and owners to achieve a psychological |
| · | | | | sense of financial success and self-fulfillment and an |
| There is an easier possibility of converting debt to | | | | exit strategy. |
| equity and to strengthen the company’s balance | | | | |