The Next Step?

So what’s the next stage of growth for your car repair business? Let’s say over the next several years, the chain grows from 10 local shops to 50 shops in three different states. Now you and your small group of investors are thinking the company could go national (and even international!) with the right infusion of capital.

When a company reaches this stage, it is very common to consider the possibility of equity financing of a different type. Instead of restricting yourself to a small group of private investors, you may start thinking about “going public” and listing your company on one of the major stock exchanges.

Taking a company public involves selling a prearranged number of shares in an initial public offering (or IPO) to investors in order to raise equity capital. This is an extremely complicated process. There are many government regulations that must be followed and many factors in the market that will influence how much money can be raised through the IPO. Naturally, the company wants to raise as much money as possible.

Global financial markets have evolved to the point that once a company goes public the potential number of investors is almost infinite. When a company takes this step, it has definitely arrived in the big time of finance.