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GOING PUBLIC / INITIAL PUBLIC OFFERINGS (IPO’s)

(This section contains 3 pages)

The principals of Venture Associates are consultants and coaches to CEOs, their management teams and Boards in taking companies public - initial public offerings or IPOs. If you have questions, we probably have the answers, because we have been there dozens of times. We invite your questions, simple or sophisticated. We would be pleased to determine if we can assist you in your potential quest of taking your company public.

Are you raising money from private investors? - Preparation of Private Placement Documents

The preface to this section is by James B. Arkebauer, founder of Venture Associates, and author of the book, GOING PUBLIC - Everything You Need to Know to Take Your Company Public, Including Internet Direct Public Offerings (Dearborn Financial Publishing - 348 pages - $29.95). Review the Detailed Table of Contents. This book has been called the bible on the topic of taking a company public.

I've dealt with initial public offerings (IPOs) and the process of taking companies public for over 20 years. Sometime ago, I began to see how the people involved found it difficult to comprehend all the various aspects and complexities of the process. This is especially true of entrepreneurs who are pressed for time and often don't know the correct questions to ask. I have been frustrated with many business book authors who have had little practical, first-hand experience in taking a company public.
This is what prompted me to write a definitive handbook.
In my case, I have gained an intimate knowledge of the OTC market as a player, broker, trader, corporate finance officer and syndicator. Additionally, I've been a public company founder, officer, president, director, and have invested in hundreds of companies, both public and private. I took my first company public in 1970, and have been involved in over 50 IPOs in one capacity or another.
Being involved in a publicly held business is an entrepreneur's ultimate dream. Taking a company public is the major financial reward. It brings glamour and prestige, and is one of the acknowledgments of success in business, but taking a company public is a complex process. It involves many different business disciplines and can be mysterious and confusing, even for those who have been through it several times.
It's not surprising that entrepreneurs and their management teams are intimidated. Consequently, they seek helpful information from IPO consultants, attorneys, accountants, public relations executives, and other support professionals.
Many of these professionals will acknowledge, however, that they don't have a complete understanding of the complementary disciplines, or in many cases, a full grasp of the total process. Some may have only a cursory knowledge of many of the subjects, others may have an in-depth knowledge of just some of the subjects.
The major need of the chief executive officer (CEO) of a prospective public company, and those on the initial public offering (IPO) team, is a fuller understanding of a complicated subject. My book provides this and it is now in its third edition and covers the going- public process from beginning to operations.
The following web pages share a small part of the information contained in the book Detailed Table of Contents and are presented here to give the reader a brief overview of the process.

What is going public?
Basically, going public (or participating in an "initial public offering" or IPO) is the process in which a business owned by one or several individuals is converted into a business owned by many. It involves the offering of part ownership of the company to the public through the sale of debt or more commonly, equity securities (stock).

What are the Advantages and Disadvantages?

Advantages	Disadvantages
Stronger capital base	Short-term growth pressure
Increases other financing prospects	Disclosure and confidentiality
Better situated for making acquisitions	Costs - initial and ongoing
Owner diversification and	Restrictions on management
Executive compensation	Loss of personal benefits
Increase company and personal prestige	Trading restrictions

Does my company qualify and will my offering succeed?
There are no guarantees in life or financing. In business, that’s why they call it entrepreneuring. The atmosphere for making public offerings is always in flux. Talk with an underwriter, IPO consultant, accountant or attorney about the market prospects. Then ask yourself:

Can I show that my company can maintain consistent high growth?
Is the public aware of our type of product or service? Do they think its in a "hot" industry?
Can our company perform as well as and preferably better than our competition?
Can we meet the financial audit requirements?

Many underwriters require that your company is generating sales of $10 to $20 million annually with profits of $1 million. That your product is on the "leading edge" and that you have an experienced, proven top management team and can show future growth rates of at least 25% annually for the next five years. To obtain a NASDAQ listing, you need $4 million in tangible net assets. However, most IPOs today are much, much larger with most offering sizes over $100 million.
What do I need to go public?
Audited financials and a good management team. The creditability and experience of your management team is the most important key in obtaining an underwriter and successfully completing a public offering. You also need a good outside team. These are your IPO consultants, accountants, attorneys, underwriters and PR specialists.
What is the Registration Process?
Going public requires a Registration Statement which is a carefully crafted document that is prepared by your attorneys and accountants. It requires detailed discussions on information pertaining to:

Business product/service/markets
Company Information
Risk Factors
Proceeds Use (How are you going to use the money)
Officers and Directors
Related party transactions
Identification of your principal shareholders
Audited financials

After your registration statement is prepared, it is submitted to the securities and exchange commission and various other regulatory bodies for their detailed review. When this process is completed, you and your management team will do a "road show" to present your company to the stock brokers who will then sell your stock to the public investors. Assuming they can successfully sell your issue, you’ll receive your money. Then it's simple, all you have to do is make a lot more money with the proceeds so as to increase the value of your teams and the public investors stock.
How much does going public cost?
Cost can vary considerably depending upon an individual company's history, size and complexity. The following figures are considered minimums and many larger offerings will have costs that greatly exceed these numbers.

Legal - $50,000 to $150,000
Accounting - $20,000 - $75,000
Audit $30,000 - $200,000
Printing - $20,000 -$80,000
Fees $10,000 -$30,000
Plus underwriter commissions and expenses as well as numerous expenses on the part of the company.

How long will it take?
3 -12 months (6-9 average - when well prepared)

James B. Arkebauer, founder of Venture Associates, is the author of various business books including:
"GOING PUBLIC Everything You Need to Know to take your Company Public, including Internet Direct Public Offerings"
(Dearborn Financial Publishing - $29.95 - 348 pages - available at book stores across the country- ISBN 0-7931-2835-8)
Review the Detailed Table of Contents. This book has been called the bible on the topic of taking a company public.
CLICK HERE for order information on the $20.00 electronic download You may order Going Public directly from

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VENTURE ASSOCIATES CONSULTING

The principals of Venture Associates have a great deal of experience in taking companies public and in the production of Private Placement Documents and Offering Memorandums. If you would like to discuss the availability and costs for services, please make contact via the following information:

Our 25th Year of Service CONTACT INFORMATION Principal Contact - James B. Arkebauer Venture Associates - Denver CO (303)-758- 8710 Fax-758-8747 Send e-mail to: arkebauer@ventureA.com

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