{"id":44213,"date":"2023-10-20T15:34:18","date_gmt":"2023-10-20T15:34:18","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/should-my-startup-go-public-the-pros-and-cons-of-listing-startupsmart\/"},"modified":"2023-10-20T15:34:18","modified_gmt":"2023-10-20T15:34:18","slug":"should-my-startup-go-public-the-pros-and-cons-of-listing-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/should-my-startup-go-public-the-pros-and-cons-of-listing-startupsmart\/","title":{"rendered":"Should my startup go public? The pros and cons of listing – StartupSmart"},"content":{"rendered":"
\"stephen-canning_-jcurve\"<\/div>\n

Becoming a public company can be a major achievement for a startup and while it\u2019s not for everyone, founders with their eyes set on this path should start planning as early on as possible.<\/p>\n

If you\u2019re on the fence about whether the stock exchange is the best place for your startup, JCurve Solutions CEO Stephen Canning says there are some key pros and cons to consider.<\/p>\n

JCurve Solutions, which provides software and cloud computing solutions for business, listed on the ASX in 2000 and now has a market capitalisation of $6.3 million.<\/p>\n

\u201cThese days it\u2019s not just about the money, an IPO is seen as a measure of success for a startup, a sort of pride that the company has made it,\u201d Canning tells StartupSmart.<\/em><\/p>\n

It can also be the perfect exit strategy for some founders and early-stage investors.<\/p>\n

\u201cYou need to think about this kind of stuff as soon as you possibly can,\u201d Canning says.<\/p>\n

\u201cYou need to understand what your true vision is and what your strategic goals are: Does listing at some point fit in with that?\u201d<\/p>\n

Win credibility, press, powerful friends and talent<\/h3>\n

Canning says the credibility that comes with startups that list has far-reaching benefits.<\/p>\n

\u201cFor startups, it\u2019s a way of attracting strategic shareholders [and] higher profile, big hitters onto the board,\u201d he says.<\/p>\n

In addition to access to organic capital, Canning says that subsequent capital raises become relatively easier.<\/p>\n

Canning says it can also raise the profile of a startup and help it attract and retain better talent.<\/p>\n

\u201cIt\u2019s easier to get media coverage and greater awareness of your company and what it does,\u201d he says.<\/p>\n

\u201cBeing listed adds a lot of credibility with prospective customers, employees and suppliers.”<\/p>\n

But while media attention is a plus, Canning notes it has its downfalls.<\/p>\n

\u201cThey do say there\u2019s no such thing as bad publicity but I\u2019m not too sure,\u201d he says.<\/p>\n

The risk of takeover<\/h3>\n

A public listing can also see founders lose control of their own company.<\/p>\n

\u201cYou\u2019re bringing in external shareholders and they may have a degree of control [so] you may be giving up a degree of control, like certain transactions may require approval,\u201d he says.<\/p>\n

Spending time with investors will become incredibly important but Canning believes new companies can underestimate the importance of this.<\/p>\n

\u201cThink about whether that\u2019s going to distract you from running your business,\u201d he says.<\/p>\n

\u201cListed companies are always at risk of a takeover \u2013 friendly or hostile.\u201d<\/p>\n

The structural burden<\/h3>\n

Laying the groundwork for an initial public offering can also be an incredibly burdensome process on founders<\/a> and their resources, which is why the earlier companies can prepare – in terms of building sound management systems and ensuring corporate governance is in place – the better.<\/p>\n

\u201cIt\u2019s so much easier to embed that into the organisation and culture from the start than to try and retrofit strong management reporting processes [later on],\u201d he says.<\/p>\n

\u201cYou\u2019ve got to have robust managing systems and controls in place, you have to be transparent around your processes.\u201d<\/p>\n

The cost of bureaucracy<\/h3>\n

The cost of an listing in ongoing fees for legal advisers and similar services can be very high.<\/p>\n

\u201cIt does go on and on,\u201d he says.<\/p>\n

\u201cThere are continuous disclosure rules and high corporate governance requirements, which means there\u2019s a lot of management time put into compliance systems.\u201d<\/p>\n

The downfall of this is it can interfere with the startup spirit of a new high-growth company.<\/p>\n

\u201cAs a small organisation it could be a conflict between being very agile and the need for compliance and full disclosure as a listed company,\u201d he says.<\/p>\n

Still want to list? Stay tuned for tips to achieve IPO success next week.<\/em><\/p>\n

Follow StartupSmart on<\/em> Facebook,<\/em> Twitter, LinkedIn and iTunes.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Becoming a public company can be a major achievement for a startup and while it\u2019s not for everyone, founders with<\/p>\n","protected":false},"author":1,"featured_media":59363,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,19,12,25,20,18,1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/44213"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=44213"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/44213\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/59363"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=44213"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=44213"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=44213"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}