With LinkedIn, Groupon, and other tech companies in the news for going public, you can now pay attention to their IPO process and see the similarities to your crowdfunding strategy on Venture Bonsai. The motivations for IPO’s and crowdfunding are the same, and both involve drumming up demand, picking a price, and issuing securities to a large number of investors. Once your company makes it to an IPO (of course, if you decide to turn down all the acquisition offers) you will feel confident and in control, because hey, you’ve done this before.

The American IPO Process

1. Initiation

The IPO process is initiated by appointing roles to outside entities whose job it is to make the process run smoothly. Here, the company will decide on its underwriter and registrars.

2. Pre-Issue activities

The company now prepares its forms and documents. One such document is called the Prospectus, which is a part of the Due Diligence process, and contains all the facts an investor needs to make an educated investment. This document also fills a marketing role because the SEC limits the company’s marketing activities while it’s in the IPO process.

3. Filing the documents

The company then files its… Continue reading →