What does it really cost to go public?
The cost for a private company to go public varies based on many factors. Startups can go public for less than $125,000 while larger companies will certainly spend more.
The main costs to go public include accounting, audit, legal, regulatory and various third-party fees. A company can spend more or less, depending on who guides them through the process and which professionals are engaged. For example, a company can hire a "top five" accounting firm and easily pay six figures for an audit, or they can hire a highly qualified smaller accounting firm at a fraction of the cost. The same applies for law firms, IPO consultants and others engaged in the process.
What is important to understand is that it costs companies a lot less to go public than they probably think. The stories passed on about entrepreneurs spending millions on an IPO is often inaccurate and misleading, since numbers that high typically include investment banking commissions for raising many millions of dollars. Smaller companies who complete their own offerings don't have any broker fees and thus can complete a public listing for a fraction of the cost.
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Regulation A governs how private and public companies can raise a substantial amount of equity and debt capital from their friends, family, business network and the general public.
Regulation CF governs how equity and debt crowdfunding can be used by entrepreneurs seeking a relatively quick and cost effective way to raise capital from their own network and the general public.
It takes about eight months for a private company to go public in the United States. The process to go public in the United States is very defined. The broad strokes include organization (and sometimes reorganization), planning, preparation of financial statements, audit of those financial statements, drafting of a registration statement, review by the Securities and Exchange Commission, filing with FINRA for trading and then applying to the desired stock exchange.
Private companies decide to go public to raise capital and make it easier to recruit talent and complete acquisitions.
Investing is hard enough when presented with detailed information about a company and their team, product/service, strategy and financial results.