Going Public with Your Online Business - dummies

By Shannon Belew, Joel Elad

You might remember the heyday of the dot-com era, when companies went public with shares breaking Wall Street records. Well, going public remains a viable option for your Internet business, even if it takes more work (and a good battle against skepticism). Companies such as Google, GoDaddy, and LinkedIn certainly have proven that the dot-com magic is still viable.

Here’s the catch: You have to follow the same game plan as any other company that wants to go public, which includes these tasks:

  • Create a sustainable business concept that’s capable of keeping shareholders happy over the long haul. Your financial statements must be in tip-top shape, and you must have a critical strategy in place to support sustained growth.
  • Take a closer look at your employees, vendor partnerships, and customers, and then begin investing in some heavy hitters (if you haven’t already).
  • Attract executives who are knowledgeable about the process of going public, and who have substantial experience with recognizable companies. You also need to partner with, or sell to, big-name vendors and customers. The more attention your company gets, the higher your public stock will be.

The pros of going public with your company are that you

  • Increase its net worth (you hope)
  • Jump into the big leagues

The cons of going public with your company are that

  • The process is complicated, time consuming, and expensive.
  • You get no guarantees.
  • A venture capitalist (a firm or person that prepares your company to go public) might ask you to step down as CEO or president if your skills aren’t a match for taking your company public.

You usually don’t decide to go public overnight. If you’re on this path, you will experience some lower-level rounds of fundraising first. During that time, you typically work with angel investors and work your way up to venture capitalists.