Drawbacks And Continuing Obligations Loss of Confidentiality & Privacy - Your offering documents such as your prospectus and the ongoing reporting will disclose much about your company including your sales, gross profit margins, net profits, salary levels, your customers, competitors and future plans. Your company will be an open book to the outside world. Annual Cost of Being Public - Cost is probably the biggest drawback in going public. Public companies must have their financial statements audited by their accountants. Regulatory filings that are often completed by securities lawyers, annual listing fee charges by the exchange that you list on, and investor relations programs are just some of the items that have to be paid for annually. These costs can reach thousands and even hundreds of thousands of dollars annually. Answering to Shareholders - As a public company, your shares will be sold to the public. Shareholders will want to speak with senior management to have their questions answered and to receive comfort that their investment is safe. Stock Volatility & Performance Pressures - A public company value is affected by the general state and condition of the economy and often their stock price may fluctuate outside the control of the Company. Risk of Losing Control - When capital is raised, dilution occurs to the major shareholders of the public company which could result in a loss of control. Ongoing Fiduciary Responsibilities - As directors or officers of a public company, you have a fiduciary responsibility to all shareholders of the public company. Investor Relations Concerns - Public companies need to ensure that their stock has liquidity and is traded daily. Public companies often hire investor relations firms to help them to disseminate information and news to the brokerage community with the hope of encouraging the community to both follow and buy the stock of the public company thereby creating liquidity. Senior management is often required to speak to the brokerage community which means visiting many offices in most of the major cities communicating their story. This is time consuming, expensive and distracting for senior management, taking them away from their business. Cost of Going Public - Going public is costly and will require tremendous commitment from the management of the company. The costs include the writing of the prospectus by your securities lawyers, audit and accounting fees, listing fees charged by the Exchange, printing costs, travel expenses, due diligence fees, assessment and valuation reports. The underwriters commission, usually the most expensive component, which is often between 6% to 10% of the total proceeds raised. Enlist Experienced Advisors Early In The Process What should you look for in a professional? Selecting the right underwriter will be a key factor in the success of your offering as they play the central role in taking your company public. This process should begin at least a year before the offering takes place to allow both parties the time to develop a level of credibility and comfort on the way toward building a strong, long-term relationship. It is crucial that the underwriter has a clear understanding of your market niche and feels passionate about your company and it's long-term goals. In making your selection you also want to secure someone with a solid reputation, experience, analyst support and distribution capability.   " R&D Funding " Angel Financing " Venture Capital " Debt Financing " Subordinated Debt " Going Public