Is It Viable That A Small Business Can Go Public?


I noticed that it is an universal belief in the small business community that small businesses can't go public until they have important revenues, say something on the order of $10 to $20 million a year.

This is completely wrong.

I have been taking Small Businesses and Start-Up companies public as a consultant for over 15 years now. And for 15 years I have been repeatedly asked in diverse ways " Can a small business similar to ours elevate capital by going public? We simply have a million dollars in revenue. Aren't we too small?"

The reply has been and still is "Of course, you can go public. And no, you are not too small."

What is too small?

Well truly nothing. An organization who is bringing in one million in revenues would be no issue to take public. But it is truly not about your revenues, it is regarding your business ideas. If you are working on a development stage business plan and you are making progress, then we can probably take you public with that alone. If you are making five, ten or twenty thousand a month that is useful since it simply signifies that you are executing on your business plan.

It has become tougher and tougher to take an organization public with no revenue and no business maneuver as the SEC and FINRA are rightfully trying to eradicate micro cap scam, but yes it could still be accomplished. If you have no revenues, however, you will need to have patience, some money in the bank to warranty you can survive for a couple of years, and you will have to be making genuine progress on your business plan to show the powers that be that you are a "true" company and not only a "sham" set up for micro-cap scam.

If you are a small business and you don't think to be mom-and-pop forever, then "Going Public" is something you must investigate in the very early stages. "Public" money is normally a lot cheaper as compared to "private" money.

I have noticed private companies who feel they are very small to "go public" give up half of their company for a small six figure investment. At times companies with revenues in the millions feel they are too small and taking the business capital route they increase ten or twenty million but end up with just five to six percent of the company in a few years.

This sort of dilution is entirely pointless. The similar amount of money could be increased by going public while sustaining 60-65% ownership

Of course there are downsides to going public early too, but many of those have to do with being preyed upon by non-professionals, swindlers, and others who truly don't know what they are doing. If you look into your advisers and get advice and structuring and referrals from experts who know what they are doing, you can reduce many problems of going public early.

And if you feel you are probably the next EBay or Google or Microsoft sort of company, going public early on without venture capitalist could be worth billions and billions of dollars.

Bill Gates simply owns nearly fourteen percent of Microsoft. Just think how rich he would be if he owned sixty percent!

Now after the "Can I truly go public?" type of queries the next set of questions I generally get are "How do I raise capital when I go public? Do I do a merger reverse? " or " I see ads that say - Buy reverse merger shell - should I do that? " But those are questions for another article. Stay Tuned.

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