Building a Sustainable Public Company with Longer-Term Investors
Much attention has focused on recent Reg A deals (Arcimoto, Shiftpixy, Chicken Soup for the Soul Entertainment, Myomo and Adomani) that have listed on national exchanges (Nasdaq and NYSE). But the question remains, is this the right move for small-caps seeking to become public companies through innovative capital raising frameworks? After the excitement of ringing a bell has worn off, the visibility has dissipated, the bankers have been paid and the festivities come to a close, a bigger challenge begins for management to grow the value of their business while balancing the resource-intensive requirements of maintaining a listing on a national exchange.
Reg A was designed for small companies, start-ups, entrepreneurial innovators and those seeking to alleviate the cost, time and complexity associated with the traditional IPO process. Part of the larger JOBS Act story, this legislation increased opportunities for transparent and online capital raising whereby small cap companies could embrace technology and the internet to improve sourcing of, and access to capital, ultimately allowing more individual investors to participate. Continue reading “Short-Term Gain = Long-Term Pain?”