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Deciding to Go Public

As mentioned above, a public offering is a highly important event in a venture's life. The decision to go public should be weighed in earnest, and the company's readiness to go public, the advantages and disadvantages entailed by the offering, and its timing should be considered.

Is the Company Ready to Go Public?

In many cases, the company is pressured from inside (or by the investors) into going public before the company is ready for that listing. A premature IPO of a company could result in an unsuccessful offering, which is reflected in low liquidity following the offering. In other words, the volume of trade in the share is low; consequently, the share is either illiquid or a significant change in its price is caused by transactions in the stock.


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