These include direct public offerings, reverse mergers and exempt public offerings. With direct public offerings, a company sells shares directly to shareholders. These are best for companies with a large, loyal customer base. Reverse mergers occur when a private company is acquired by a dormant public company and, in the process, becomes publicly held. The reasoning goes that as a public company, its options for securing financing increase dramatically.
Exempt offerings are exempt from state and federal securities laws.
This is important because it is the existence of securities regulations which makes conventional IPOs so difficult. They're worth looking into because by utilizing them, companies can gain direct access to individual investors. David R. Evanson, a writer and consultant, is a principal of Financial Communications Associates in Ardmore, Pennsylvania. Art Beroff, a principal of Beroff Associates in Howard Beach, New York, helps companies raise capital and go public. Inc. All rights reserved.