Answer = b: Investors will want to cash out from their original investments prior to when the company goes public since they have been sitting on the side lines, waiting to generate a return on their original investment when the company was private.
A public infrastructure is critically important to ensuring that the company can function as a public company. Which of the following can help build a public structure for a private held company?
Higher customer retention rates
Answer = d: A private company can start to transform itself into a public functioning entity by doing things like publishing audited financial statements. This will make the IPO process easier.
The most significant costs associated with an IPO is:
Registration fees
Underwriting fees
Audit fees
Printing the Prospectus
Answer = b: Fees paid to underwriters represent the most significant costs. They are a percentage of the capital raised.
It is extremely important to have a great management team. This helps sell the IPO before potential investors. If the management team is weak, one good source for building the management would be:
Wall Street Analyst
Answer = c: It is important to sell investors on the fact that the company has some seasoned veterans on the team, giving investors some added confidence about the future success of the company.
Which part of the Prospectus provides the investor with an inside perspective from management’s viewpoint?
Management Discussion & Analysis
