Securing finance through venture capitalists allows startups to begin developing and cultivating their company and, should it succeed in gaining traction and success in the market, an Initial Public Offering (IPO) is the realization of the fund to withdraw their investment. Selling shares publically and taking the business out of the private sphere requires dedication, intelligence and thorough planning. An IPO can generate huge amounts of capital for expansion and can lead to greater establishment of the business in the given industry.
Among the many benefits of IPOs are:
- The access to capital can generate growth and can be used to fund further research, development and expansion of the company.
- The sale of shares creates liquidity which can serve as an exit strategy for venture capitalists.
- An IPO increases public awareness of the company and enhances its reputation and establishment. Greater exposure can lead to greater marketing promotion and subsequent increase in customers.