MATURE OR DECLINE
As a business matures the natural tendency is to sit back and relax watching the profits roll-in, perhaps making as few adjustments as possible in order to keep the momentum going. However that is the most dangerous and difficult time in a business cycle as new competitors with lower overhead expenses can innovate much easier and faster.
Funding innovation at this stage will require that you make a solid presentation with high valuations as the "bait on the hook" and that you are prepared to lose 10-50% of your company equity to the venture capitalist you seek. If this is too high a cost for you then you must prepare for this contingency early on by saving for the rainy day that will inevitably come.
The fate of your company is in your hands and only you and your executive team can determine which is the best course of action at this crucial point. Depending on your continued enthusiasm for your industry, company, employees, supply chain, products, services and customers it may be time to expand your scope by opening satellite offices, expanding distribution channels, setting up a franchise program, mergers and acquisitions or going public in the stock market .
Anyone of those actions will require the additional resources of financing, process and human capital that you may not possess. Underwriting your IPO will be an expensive and arduous endeavor that many private companies dread, but access to an unlimited supply of international working capital with no strings attached can be a tempting proposition. Only you can choose to age gracefully into obscurity or rejuvenating your process, people and products before it's too late.
Anyone of those actions will require the additional resources of financing, process and human capital that you may not possess. Underwriting your IPO will be an expensive and arduous endeavor that many private companies dread, but access to an unlimited supply of international working capital with no strings attached can be a tempting proposition. Only you can choose to age gracefully into obscurity or rejuvenating your process, people and products before it's too late.
Regardless of the path you choose this is the time to stand up and take a hard look at your business. Any investor will want to audit your books anyway. Angel investors, private equity, venture capitalist, growth capitalist, local, regional, national and international banks. Most financial officers, accountants or CPAs can help you set up the tons of paperwork but since raising funds by selling stock in your company involves the general public an investment banker like JPM Chase, CitiGroup, Credit Suisse, Bank of America, Deutsche Bank, Barclays, Allen and Goldman Sachs will be required to register your IPO with the SEC in order for government oversight and the public interest.
These are the folks that buy your equity for an agreed amount and then sell it to the public. A necessary middleman if you want to ask for money in public. In reality going public requires a lot of expertise, a large team and money to pay the underwriting costs, so this is not for everyone especially considering the many other routes to working capital.
