Corporate Finance

Working Capital
Growth Capital
Recapitalization
Refinancing
Debt Financing
Equity Financing

Equity Financing

Public Equity		Private Equity
Initial Public Offering Secondary Offering Rights Offering	Common Stock Preferred Stock Convertible Preferred Stock Private Investment in Public Equities (PIPEs)

Initial Public Offering
For many companies that are seeking capital for growth or liquidity purposes, going public through an initial public offering, or IPO, may be the best vehicle.

Benefits

• Further Access to Growth Capital – The proceeds from a public offering may be used for such purposes as providing working capital, retiring debt, consummating acquisitions, performing research and development, building or expanding facilities, or upgrading technology. Additionally, once a company is publicly traded, it may return to the public markets to raise additional cash in secondary offerings.
• Employee Compensation – Nothing is more important to a business’s growth and success than the ability to attract, motivate, and retain talented key personnel. Once public, a company can use stock, stock options, and stock related plans as meaningful compensation and benefits for key employees.
• Liquidity for Investors – Going public provides liquidity for a company’s founders and other investors that may want to diversify their wealth or “cash out” of their investment, as the stock can be sold more easily on an open market.
• Acquisition Currency – Once public, a company obtains the ability to use unissued stock as collateral for potential acquisitions. The unissued stock has a ready public market with the benefits of liquidity and an ascertainable market value. The ability to use stock as acquisition collateral to facilitate mergers and acquisitions can offer a substantial and powerful competitive advantage.
• Improved Corporate Image – Being a public company has the effect of providing more visibility, perceived stability and enhanced stature. Public companies are typically better known, are viewed as more stable than private companies and as more attractive business partners for customers and suppliers. Lenders and suppliers also may perceive a public company to be a better credit risk than a private company, and therefore be more inclined to extend favorable terms to a public company.

Although numerous benefits come from raising capital through a public offering, there are also many new responsibilities that a company must take on. A re-examination of the reasons to go public in light of these new responsibilities may lead many companies to conclude that staying public is not appropriate.

Factors such as the increased expenses (related to financial and operational reporting, Sarbanes-Oxley compliance and D&O insurance) and less flexibility in managing the company’s operations and goals may cause a company’s management to consider going private, if the positive attributes of being a public entity are not as beneficial as they once were.

How Atlantic American Can Help
Atlantic American can assist you in making the often difficult decision of which type of financing to pursue. If the decision is to go public, we can assist in positioning your business to obtain the highest possible market valuation. We can then assist you in marketing your company to our extensive network of potential underwriters, market makers and investor and public relations firms.