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Further
Reading ...
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Make Money At Home-Start Here First - Jeff Schuman
So you want to make money working at home! You are not alone. According to a recent search I did the term make money was typed in almost 100,000 times in one month. There are a lot of people wanting to make money working at home. I was one of...
Stay In Charge of Your Time - Arthur Cooper
Are you in charge of your own time? Think about what you did last week at work. Were you in control of your time? Or did it seem that your time was being controlled by those around you? Are you pleased with what you achieved, or do you think you...
10 Quick Ways To Start A Business - BB Lee
Are you thinking about starting a home based business? Great! Now, is the time to stop daydreaming about your plans. Take hold of your future and realize that dream NOW! The following are home based business ideas that do not require...
Beyond Blossoms Gives Online Flower Shops a Facelift - Josh Grossman
At Beyond Blossoms, a New England based flower company featuring European style fresh flower bouquets, business is blooming. With its newly redesigned website (http://www.beyondblossoms.com) the up-and-coming company is challenging larger...
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IPO Costs
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Written By:
William Cate
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IPO Costs
By William Cate
Published January 2000 [http://home.earthlink.net/~beowulfinvestments/] [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
The following data is taken from "Going Public" by James B.
Arkebauer (1994) and the IPO cost website at:
http://www.intranet.ca/~tgil/p2.html
You should keep in mind that costs vary based upon the complexity,
the size of the underwriting and the history of the private company.
The following IPO costs would be reasonable for a company with over
$2 million in gross revenues and a 3-5 year operating history. A startup
company would pay less than half this estimate to do an IPO.
In some cases one or both sources acknowledge a cost listed below,
but fail to offer an estimate. In those cases, I've supplied an estimate
based upon my IPO experience.
Pre-IPO Costs$300,000
Legal Costs$175,000
Accounting$80,000
Printing & Mailing$100,000
Translation$30,000
Market Prep Costs$90,000
Investment Bankers$50,000
Consultants$50,000
Moody's or S&P$6,000
Blue Sky Fees$20,000 (California only)
Transfer Agent$2,000
Mgnt & Admin$200,000
SEC Filing Fee$5,000
Taxes$15,000 (Estimated)
Total$1,123, 000
Underwriting Costs
The underwriting cost is a function of the money raised in the IPO. - continued below ...
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continued ...
The
NASD allow up to 18% in costs. If the gross revenue from the IPO is $10
million, this is an underwriting cost of $1.8 million.
Here's how the costs breakdown
Nonaccountable Expense 3%
Accountable Expense 5%
Discount 10%
Company supplied IPO buyers usually 50% (10%-90%)
Commission 5% - Its paid by the brokerage firm client and doesn't affect
the money received by the company.
Compare these costs with that of doing a spinoff. For a startup
company seeking a million dollar financing the cost is $150,000. For an
operating copy grossing over US$2 million, the cost is US$250,000.
If you want to arrange a spinoff or blind pool, contact me. We can
arrange a fee consultation.
To contact the author: Visit the Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit the Global Village Investment Club Website:
[http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
About the Author
He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]
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| _Additional Resources ... |
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Your Financial Future - Ioannis Evangelos Haramis
"Wonder is the foundation of all philosophy, inquiry the progress, ignorance the end!" Michel de Montaigne (1533 - 1592) Financial independence is one of the most important goals for most people. Yet people sometimes miss the opportunity to become...
How to Increase Sales with Automation Improvements - Diana Barnum
How popular is online shopping? And is there room for improvement? Let’s check out some pros and cons of automated shopping and see. Digital carts offer convenience for people around the globe 24 hours a day. Yet an estimated 4 percent of...
How To Increase Your Sales From Your Newsletter - Ron Pioneer
The first and most important thing you should know when thinking of your own newsletter is that YOU can do it. Yes, you can write your own newsletter. There is nothing much to it if you are ready to do it. If you can write a letter or a note to...
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