Mr. Klein, however, defends state regulators who view DPOs with some suspicion. In some states, he says, it is explicitly part of their job to protect the investing public from bad deals. Don't think it ends after the offering. Don't assume that outsiders will hold your DPO shares in the same esteem as truly publicly traded stock. In the eyes of commercial and investment bankers, DPO capital often is worth less than traditional venture capital.
Lenders prefer to have a deep-pocketed backer as a repayment source of last resort.
Furthermore, investment bankers may consider a large shareholder base a nuisance when trying to raise capital for a small company. They wanted to see a venture capitalist. Wood is a writer in Nashville. Inc. All Rights Reserved.