For any offering where SEC registration is needed, the company prepares a preliminary offering circular or prospectus with the help of a securities lawyer and then submits it to the SEC for approval. Once approval and an effective date are obtained from the SEC, the company delivers its final offering circular or prospectus to interested investors, via either the Internet or conventional means, or both, and may then actively solicit offers for its stock. The company will usually employ a transfer agent to actually issue the securities. Internet aided public offerings still appear extremely risky, and most Internet aided IPOs appear not to achieved all of their goals. Even a successful Internet aided IPO may take several months to complete following its effective date, as contrasted with a traditional public stock offering conducted through underwriters that obtain purchase commitments beforehand, and then close on or about the effective date.
Internet aided IPOs also remain costly.
Experienced legal counsel must still see to the offering s filing with the SEC and with the securities divisions of all states where stock will be offered, and it is preferable for credibility purposes that a widely known accounting firm prepare audited financial statements. A Web page developer must construct and maintain the offering site. There also may be substantial financial printing costs. The company must also assign and train its own staff to do the underwriters job of receiving and responding to expressions of interest, and offers to purchase stock, a process that may consume more time than anticipated because of the lack of a foreseeable closing. Finally, a transfer agent will still be needed to collect funds and distribute securities.