Few entrepreneurs understand the complexities of going public. Most entrepreneurs have an idea of what to expect but most are clueless when it comes to examining the possible downside of the transaction. There are many things to consider when you decide to take your company public. I will attempt over the next seven Blogs to cover areas of most importance. In our overview we are assuming that the IPO would be for a company that has an underwriter and would be qualified for listing on NASDAQ post closing.
Going public is not for the faint of heart. It is no easy exercise and the out of pocket costs alone can run as high as $2.5 million. And that, my friend, can be money down the drain if your IPO is cancelled by your underwriter or you do not close on the transaction for lack of interest. Or worse yet, you can be blindsided by something that comes out of left field. Read the recent article of one unfortunate IPO candidate.
ShoreTel IPO derailed by lawsuit
Silicon Valley / San Jose Business Journal - 2:59 PM PDT Thursday, June 28, 2007
ShoreTel Inc.’s initial public offering was put off Thursday after a lawsuit was filed on Wednesday.
ShoreTel had priced it offering and was scheduled to begin trading Thursday on the Nasdaq Stock Exchange. The 7.9 million share offering was priced at $10.50 per share, the high end of its target range of between $8.50- and $10.50.
But it never started trading after Ottawa-based Mitel Networks Corp. sued ShoreTel in the U.S. District Court for the Eastern District of Texas, alleging infringement of four Mitel patents.
Sunnyvale-based ShoreTel provides Internet protocol telecommunications systems.
The company’s public offering is being underwritten by Lehman Brothers Holdings Inc. (LEH) and JPMorgan Chase & Co. (JPM).
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What should you know about the downside and cost of embarking on the path to an IPO?
Over the next several blogs I will address the major concerns that must be resolved before you make a final decision.
The first thing you should consider is “What kind of person am I”. Do you have the intestinal fortitude to take your company through this arduous task? Do you understand the countless hours that it will take for you and your staff to complete the “due diligence” process. Can you continue to run and expand your business and simultaneously dedicate the time its takes to complete the IPO process. Most importantly, can you deal with the probability that at the end of the day, for some unforeseen reason, you may not cross the finish line?
The IPO process is grueling, can take up to a year to complete, and will suck the living life out of you and your company.










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