When trying to raise capital to fund their vision, most entrepreneurs will eventually make an IPO, therefore boosting visibility with the media, as well as their credibility with investors and other stakeholders. But what if going public offered much more benefits?
Not only you could grow your business through acquisitions but you could also use shares instead of cash to compensate your employees and retain talent – which is arguably an aspect to bear in mind following the Big Quit phenomenon, right?
But one of the least known attributes of being a publicly listed company is access to follow-on capital, meaning the ability to continue raising capital even after your IPO in a streamline fashion and often in a matter of weeks through another round of funding – allowing some companies to keep with their head above water in volatile times.
Even in the deepest crisis – like in 2009 and 2020 with the IPO window closed – we saw enormous levels of capital raised by already listed companies. As London Stock Exchange Group CEO Julia Hoggett reminded,
“over 68 billion pounds in 2008, over 100 billion pounds in 2009 and close to 42 billion pounds in 2020. That’s a lot of money to have access to in the middle of what we hope would be a once in a century crisis. It protected jobs, and kept economies and innovation going.”
On the other hand, for those who want the benefits of public markets without the need for additional capital and the mind full of underwriting fees, there are other routes available: British company Wise was the first fintech in the UK to complete a direct listing, meaning going public without issuing new shares through an IPO but selling existing shares to the public instead.
But what if a business is not ready to go public and needs more time to mature and meet the regulatory standards that public markets demand? This is where companies like Floww come into play, by bringing together in the private markets those who need capital with those who have capital, as powerfully as we do in public markets.
A word to the wise.