Be prepared to have a variety of numbers thrown your way in terms of the “right” answer for this question. Some people think $100M is the sweet spot while others will tell you not to even think about an IPO until you have at least double that. The key to filing for an IPO is to make sure your business is ready for it. Revenue is a piece to the puzzle, but you have to think of the bigger picture.
This is what you need to consider:
- Does your business have potential for growth? Let’s say you have $100M in revenue right now, how are you going to grow that number once you go public? Filing for an IPO should not be the end of your growth potential, but should just put you on a better path toward it. You should have ideas in mind of how you plan to continue to grow or else your business will go nowhere. Don’t be afraid to test out some of your strategies before filing for an IPO. You need to have the best idea possible of how well your company will do once you actually obtain the IPO.
- How vulnerable is your business? All businesses have weak spots, but none of them should have the ability to sink you. Contemplate your limitations such as your major competitors or even your consumer base. While any of these things can be a challenge, you shouldn’t place the entire weight of your company on the success or failure of these points. If any one thing could lead to a total loss, then you need a better strategy.
- Is business predictable? Even if your current revenue is low, if you know for certain that the coming year will lead to even more income, then you have established predictability in your business. However, if you have a huge revenue now, but can’t say with any certainty what’s in store for you in terms of profit, then that higher revenue means nothing.
The best solution is to rely on the expertise of a skilled business attorney. They can walk you through the steps of filing for an IPO and discuss various aspects of your business that may influence whether or not this is a good idea for you at this time.
would be happy to assist you with finding the perfect business attorney for your situation. We offer project management from start to finish so you know that you are in good hands. We have helped over 1000 entrepreneurs establish their business and we’d be happy to do the same for you. We are ready to hear from you!