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Advantages of an IPO:
As stated in the reasoning above a company will obtain the funds needed for the various initiatives. Another advantage of the company going public is the publicity that comes along with it allowing for potential new consumers that may have not otherwise had an opportunity to hear about them. Additionally, the company founders may be able to cash in on their hard work as investors begin to recognize what the company has to offer and the value associated with them.
Disadvantages of an IPO:
Of course, not every aspect of going public is going to be hunky dory. Some of the hurdles that a company may face in going public include the legal work associated such as financial disclosures. On top of
this, the regulations for financial filings and
reporting are costly and may even require
bringing on a new investor relations
department to handle this. One concern that
many have is the potential shift in focus that can
occur where the short term success tends to trump
the long-term growth as management tends to
get scrutinized, thus pressuring them to do what
is in the immediate investors best interest.