How can a small company IPO on a major exchange?

welcome to episode 42 of fundraising demystify today we have a unique guest on the show with us Peter Goldstein the author of The entrepreneurs IPO an expert in taking micro cap and small cap companies public if you want to learn what it takes to go public then this episode is for you Peter is the CEO of exchange listing a firm helping micro and small cap companies go public if your company's valued at 50 million or more this episode will be an eye openening experience for you to discover that venture capital and private Equity isn't your only option Peter's experience started as a Founder with multiple exits and IPOs leading him to work with other Founders to help them pursue listing on major exchanges to create liquidity and growth Capital Peter and I dive into the details of going public this episode is a mini master's class and you're going to love it now if you want to get updates on our weekly podcast and newsletter be sure to subscribe at join. thunder. DC again that is join thunder. BC now on to the show hi everyone welcome back to fundraising demystified today we have Peter Goldstein with us founder and managing director of Ms capital and CEO and founder of exchange listing welcome to the show Peter Jason great to be here thanks for having me and I'm excited to have you know a dynamic dialogue and share some great insights along the way no I'm excited to have you on the show this is a little bit different than our typical audience our typical guests that we have on we're going to be diving into how companies can go public and kind of what you're doing to enable that so you I'm excited to have you on the show so let's let's let's go ahead and Jump Right In you Peter you're a capital allocator you're an author and you help companies go public it's a pretty unique background so can you give our audience a little bit about you and what your story is yeah I'll give you the the the shorter story you it goes back to uh you know the childhood you know newspaper route and raking Lawns and you know I really believe like I have entrepreneurial DNA you know built in me um kind of the I'm 60 now I started my first company when I was 24 and I had my first exit at 30 and so really you know for the last 35 years I've been focused on building companies it's where my passion lies and and specifically I would say in the last 20 years my Niche is oriented around the capit markets and working with small and micro cap companies that are either wanting to be public for the first time through an IPO or are existing public company that are undervalued and haven't gotten all the benefits out of being you know a public company so my my journey has been quite unique in the sense that one kind opportunity led to the next uh I have you know been a Founder taken two of my own company's public I've been an investment banker I started my own Investment Bank from scratch uh was fully licensed sold that and then really have created exchange listing in EMS to serve in this Niche that is greatly underserved and quite honestly is misunderstood by many people around what's possible for emerging growth companies to utilize and access public capital and liquidity in the capital markets okay this is going to be a fun conversation I have so many questions um you know so let's let's kind of start back at at you know kind of your role in taking companies public um and well one your companies so let's maybe start there like tell us a little bit about that history and what that experience was like in terms of building a company that was ready to to go public what was that like you know before I took my own companies public I work as an advisor on several micro cap companies that had approached me I was working with them on more traditional scaling you know business operations and and Business Systems and one of them we were doing some m&a work asked me to help assist with their going public and I knew nothing about the process they trusted me and asked me to look into and educate myself and educate them and so I cut my teeth back this is 20 probably five years ago now Jason on doing a reverse merger with a private company and a public company which in Canada and the US throughout the years has been a oneway for for company in the micro and small cap space to get the access to being a capital Market you know publicly based company and along the way I realized that there's a lot of great opportunities for small to micr siiz cap companies to be able to access capital and liquidity that wasn't really fully served by investment bankers so you know it's very hard to find a banker that will recognize you know companies of this size more importantly what I what I learned was that the ability to grow your business when private into maturing into a public company you know takes time and planning and takes resources I didn't have a lot of that knowledge when I took my first companies public uh my first one was on the OTC markets uh my second one went on to NASDAQ so you know as a a principal and a Founder I made all kinds of mistakes um learned all kinds of lessons which I now obviously want to bring to the entrepreneurs that I work with and to the audience and to be able to educate those that really are wanting to and committed to pursuing the path of being public so let's start with some education Walker audience to the difference of the OTC and you know listing on OTC versus listing on NASDAQ so we focus now on NASDAQ New York Stock Exchange and actually the sibo which is the Chicago Board which are all senior listed exchanges there was a time where the OTC markets were much more vibrant for earlier stage companies kind of um to be able to develop and mature uh as a public company and and be able to access capital and liquidity uh unfortunately a lot of that has dried up so now we're really focused on getting to a senior exchange because that's where the benefits come I'm being able to access institutional Capital being able to have the benefits of you know liquidity and and the combination of those are really now where we would work with any company that would want to go public and meeting those listing criteria which are much more rigorous than it would be on the OTC markets gotcha and let's just you know talk about that a little bit more so you're basically saying OTC is you know not what it used to be and correct me if I'm wrong my terminology is wrong but trading pink sheets is uh you know not the the thing anymore kind of trading these like super micro youo cab stock is that something you're just you know not seeing activity in like they used to or what's kind of your take on that market yeah Jason it's a viable you know option but there's just not a lot of liquidity there a lot of the institutional investors have mandates that they need the companies to be on a senior exchange you know because of the compliance you know the regulatory the transparency the reporting so there's just much less capital and therefore much less liquidity than there used to be there are still a number of really great companies that are list on the OTC markets just like there are in the csse and and the ASX and other kind of junior I'm going to call them exchanges for for for this conversation um but they don't get all the benefits of being public so we actually work with companies that are in similar situations that are ready to I'm going to say graduate to a senior exchange um but yet if somebody was initially wanting to go public now in this market in this time I would only be recommending a senior exchange listing go and what are some of those benefits of going to a senior uh senior exchange you know you can take the obvious ones right of access to Capital and and liquidity and and I'll start with the capital because I think it's really greatly misunderstood Jason that a micro and small cap company meaning you don't have to be a unicorn in order to access institutional Capital there are a number of investors that focus on emerging growth companies you know Future Stars right they have to start somewhere and as an alternative to venture capital as an alternative to private Equity there is capital albeit expensive just like anything else these days uh that is formed to be able to invest in companies that have liquidity events and then of course the value that I believe is much greater to companies at earlier stage is the benefit of the structures and the transparency that are required to meet the listing metrics meaning if you can operate your company as if you were already public and then an existing public company it comes with much greater transparency you know oversight systems controls that really benefit the entire organization and all of the stakeholders that are a part of it what are some of those criteria like what what kind of like What stages a company need to be at before they would even start considering this process of you know going public at the scale that you're talking about yeah so let's frame it Jason so there's small cap and micro cap right small cap really starts $300 million market cap or above let's take it up to a billion that's a very wide range that's a wide birth of companies right and then micro cap would be 50 million to 300 million right there are nanoc cap but they don't really fit this Con ation um that would be more of the OTC or or earlier other platforms so where we're where we're looking at micro cap companies that definition of $50 million market cap which is simply defined as you know your price per share times the number of shares that you have issued an outstanding to give you an overall market capitalization yeah and you know when you coming from the private markets which most of them our audience is coming from you know Venture back or private Equity back companies you know they think of hey I'm raising $10 million giving up 20% of my company we $50 million Market you know or you know Valu you we're valued at $50 million is you know that's not necessarily equivalent in this case correct like what what's kind of the underwriting that's required and like what kind of Revenue are these companies at that would typically fit the criteria to go public on these you kind of the micro cap numbers or small cap it it is actually similar in in the beginning Jason it changes over time because then there's a mark to Market on your stock one of the one of the pitfalls of being public is that that's a volatile market cap right you know especially in this market you know stocks are opening up below issue but they start off with that same formula okay you know with evaluation and that valuation is typically entered into with the help of the Investment Bank of course with comparable companies and comparable you know valuations that are defensible but really it gets set initially by the investors that are participating in the IPO so as much as every every entrepreneur I know including me when I took my companies we we we think all of our babies are perfect and they're absolutely beautiful and therefore they should be getting the ideal premium uh it's just really between the investors negotiating you know and that's where the old auction came from right in the IPO process where it's going to be dependent upon the market and and that is something something that happens dynamically at the time companies are ready to go and now of course you know companies can test Waters there are a lot of tools they can utilize to determine if the market is going to be receptive and it will meet their valuation in this environment down rounds are happening on a fairly regular basis meaning that you know the private or last round that was done uh would be you know at a higher rate than the current round is being done to access more capital and potentially even to access liquidity so for a lot of companies out there they're dealing with that exact problem down rounds or some pretty aggressive liquidation preferences or you know preferred shares that have certain you know premium rights over you know the common um is this a way or an option for companies to maybe eliminate some of that baggage on their cap table by by going public it it is you know depending on those nuan Jason right like every every you know I want to do the the blanket disclaimer that that's specific to the type of structure right and and the criteria of their their prior Capital rounds which we'll talk about probably later about some of the better practices to be leading up to you know a public liquidity event but it it is an option and often there are conversions of those preferred shares Andor debt that can come along with the liquidity event so the balance sheet can often get cleaned clean up significantly and you have access to new and fresh capital and and typically you know what we're seeing especially now more these days are where the pockets of venture capital or private Equity that the companies had utilized before are no longer available to continue to invest either at the same level or even lower so there is more optionality and I think the message I want to give you know you and to the listeners is that there was much more access than people realize at the small and micro cap level because most people are kind of ingrained in the fact that oh you have to be a unicorn VC backed with 100 million in Revenue you know 15 to 20% eida 30% growth that that's just not true those are myths that got created on Wall Street largely driven by you know the.com bust where you know it was seen that if you're too small and too early you're too high of a risk well 25 years later a lot of those myths still remain and I'm here to tell you that you know that's just not reality so let's talk a little bit about your firm um both the capital allocation fir the fund as well as uh exchange listing your your fir your firm that helps companies go public tell us a little bit about you know what you're doing at these firms to going to help companies navigate these options so I'll start with exchange listing because that's the ADV advisory side and I it's really the heart of our business you know we we look at especially in this market that you want to take 12 18 maybe even 24 months before you're ready to be public to get prepared to be educated so if you're a large cap or midcap you're going to go to deloy you're going to go to a McKenzie right you're going to go to Accenture if you're small cap and micro cap there are not that many options so we create I specifically created Exchange listing to satisfy this need and the need being you know really interesting Dynamic emerging growth companies whose management is committed to going public and needs someone to advise them through the entire landscape so of course they could go to a banker or they could go to a lawyer or they could go to their accountants and Auditors but they don't necessarily have the entire ecosystem nor do they have the time the perspective to be able to work with the management team and all of their stakeholders and the board members to prepare them so we have a wireframe that could take anywhere from 6 12 18 months to walk the companies through all the varied aspects and the dynamic nature of being prepared for and educated before you even begin executing so in a perfect world I would say to a company take a year and start to develop your systems your reporting start drafting your SEC requirements start building your board right start operating inside of what it would be just like going to the gym and flexing your muscles you know you need to develop that over time you don't just get you know buff and ripped overnight these are criteria you know that over time will prepare you best for that eventual event and that's what that's our role we then work directly with this the exchanges I talk regularly with NASDAQ New York Stock Exchange American you know the sibo and understanding when a company is ready to apply what the process is what's needed to satisfy the listing requirements both quantitative and qualitative we work within the investment banking Community you know we introduce our clients to select investment bankers looking to make that match right between the bank and more specifically the banker and the company who's going to be the champion of carrying that company to Market same with the Auditors same with legal really the entire ecosystem that I've been operating in for 20 years now as a resource to flatten the learning curve the cost and the timeline for companies to prepare to go public so I imagine you know you've done this obviously a handful of times not only for your own businesses but for your clients that you've serviced what are some interesting stories you've kind of been through dealing with helping these companies you know go Hub like well what are what are some of the horror stories and what are some of the success stories that you know really shaped your business there are so many Jason every time I think I've seen it all right like I'm 60 I've been doing this for a long time and uh that's part of what I love about what I do because just like the markets are dynamic as is the process of taking a company public you know the the the crescendo right that that kind of beautiful moment of going to a bell ringing uh is really just the phenomenal event where all the hard work comes together in a moment of Celebration I had the benefit a few weeks ago of going to the Chicago Board of exchange which just became excuse me began listing companies they've been uh you know historically Futures Commodities you know and trading ETFs so we did the first actual issuer IPO at the CBOE and uh so I got to B basically participate in that bell ringing event with the company which is an AI company um and and it really is a very rewarding work after that was about two years of volatility in the market and being able to overcome challenges to be able to actually Access Capital for the company to successfully list and trade um you know I could give you I could talk to you for days about the War Stories my own included I I think like I made so many mistakes because I didn't have guidance and I didn't know one just out of curiosity what would be one of those mistakes I'll give you the classic so when we filed our this is my first when I took my first company public I didn't know the difference between how to interact with the lawyers and with the Securities Exchange Commission and I had a young lawyer who I still work with now 25 years later and we were so focused on diligently addressing every question that came to us from the SEC and and exchange because it's a dialogue the SEC asked you question questions they provide comments and you provide a response and we I went on for 13 months discussing certain things and dialogue with the SEC that really could have very easily been answered without challenging and trying to prove a position of fighting over dotting an eye and crossing a te right so you know young early stage you know kind of didn't have the big perspective and what should have taken six months ended up taking you know 13 to 14 months as an example and those are hidden costs inside of going public if you're spending twice as long in a review process paying for legal you know you know it's restricting you from being able to enter into accessing capital and liquidity so that's just one that comes to mind of an early uh learning ground now as I do this first of all we have the knowledge base where we write the SEC perspective in in conjunction with the lawyers so the lawyers do the legal component risk factors all the disclaimers all the N right we focus on the company's message and the company's particular position and value proposition because that's a historical document when you write an S1 something that's a legacy document that lives for the lifetime of the public company and and with inside of that if the secc comes back and says we'd like you to reposition this language or that language now we work with them we complete that and then we move on to the next task as opposed to taking you know extended periods of time to prove the point that we want to thought the eye and cross the te so there's there's many um you know the biggest mistake I think that that company entrepreneurs make when they're taking their companies public is that they underestimate the amount of hard work that it takes not just to get there Jason but then you first have to then begin operating as a public company and you're under almost immediately an immense amount of pressure and now you're operating a second business line which is managing the public side while you're still responsible for managing the operational side of your business yeah that's a an important component that I imagine is a bit of a shell shock for for Founders once once I get to that point what um what's something where you had a situation where you kind of go in everyone's kind of got their expectation of like here's the goal post and maybe you ring the bell maybe you don't ring the bell but like what what was something where just got completely derailed or something that was just such a shock to the the plan uh what was the situation where where that happened well if I if I think about recent ones it's where there have been assumptions made in the financial projections and this this a great learning ground it's a great question so so many entrepreneurs are forward-looking and based upon their own experience and their belief and their set of that entrepreneurial kind of grit that they believe they're going to be able to go out and produce a certain amount of Revenue or produce a certain amount of contracts uh more than often in this environment those things take longer uh cost more and and where I now look really with you know the very fundamentals of testing out an early stage growth company assumptions for their revenue and everything that goes into the financial modeling and in in recent I will tell you that there have been really superb management companies that were VC backed that had great projections their assumptions didn't hold up and it really caused significant setbacks when investors realize that what the company has been projecting and that would be the basis of their valuation and the return on their investment isn't valid that's harsh that's a that's a that's a harsh reality it is so we talked a little bit of the the Doom and Gloom or the tough stuff let's talk about some of the positives uh so company decides to work with you or you know in general go you know pursue the uh the going of public and what's the situation like what happens okay you get to that point you ring the bell you got you have all these responsibilities of running a public company but what are some of the positives Beyond just access to you more Capital because you can raise money in various different ways once it's public like what what are some of the the the net positives that uh maybe aren't as obvious that have occurred for some of the companies you worked with I think there are two that come to mind Jason one is the ability to use your stock to attract management right inside of employee stock option plans uh to attract Human Resources you know we're we're all struggling to find the best people that we can to work for organizations to grow and scale our organizations one of the great ways to be able to do that is to motivate and reward them with another currency you know outside of you know their cash compensation and then I take that further where you could use that same stock and that currency to go out towards strategic Partnerships right to go out towards m&a opportunities you know to be able to make Acquisitions utilizing your stock as another currency and that that leads to what I I think think was one of the undervalued benefits of the going public which is the credibility that your brand gets so we also work with a lot of foreign issuers Jason who want to come to United States one because of the capital markets and access to Capital but also to bring visibility to their product their service or their technology when they want to scale and grow and you don't need to be foreign in order to benefit from that you know think about the value that you're getting of ringing a bell and whether it's NASDAQ New York Stock Exchange just the footage the coverage the exposure that that gives to your brand millions and millions of dollars worth of value that you're not paying for directly right it's an indirect benefit and then of course because now you're have proper governance you've met all the listing criteria you know any particular I would say future business opportunities you are overcoming such hurdles that other small to medium-sized companies might otherwise have a challenge overcome and as you're sharing this you know something that just always kind of sticks with me is you know as BEC more and more common place in terms of topic uh gets brought up like companies are staying private longer you know you go to the 80s 90s and you know up until basically the bubble everyone was going public super early um it early compared to what they are now you know now companies are waiting to be you know a billion dollars in Revenue before they go public um why do you think they're waiting so long especially when we're in such a dry market right now like everyone's starving for liquidity there seems to be so many benefits to to going public obviously there's Market hesitancies oh they're going to drop at going public or whatever but there just seems to be so many net benefits you know why are investors and Founders wanting to stay private longer yeah it's a great conversation I don't think there's any one particular you know specific issue I think it's a whole host of issues that are often very specific to the company itself or or also to the financial backers to the VCS or or or the private Equity investors and and I think largely you know the answer lies in economics right now unfortunately you know many issuers have done their IPOs open up slightly above and then dip below their issue price and and that penalizes shareholders so when the one side you have access to Capital and liquidity the other side there's downward pressure and I think that downward pressure the cost of going public you know the pressure the the negative potential impact on your price of your stock are are very practical reasons why one would not want to consider doing that in this environment or quite honestly in any environment it's just now more so than ever Jason there's just tremendous pressure there's a a lack of quality capital whether it's vcp or or the institutional side it's across the board right there's more money in the sidelines now in every one of these areas than there has been you know maybe in our history right so for those companies that are going public there's an extra component of downward pressure and a lot of the money is is fast money right they're they're the the prior round of capital may be locked up the new round of capital is in a POS Superior position and often they're looking to get liquidity out as quickly as possible and that puts you know a very kind of challenging position for companies when they're also Under Pressure to be able to perform hit their growth numbers hit their milestones and manage you know these kind of negative pressure of being public so my oversimplification of that is private investors have kind of overinflated some of these Investments That they've made to the point where the company hasn't yet yet grown into the valuation that the public markets respect or you know would value and so therefore there is that immediate down pressure to go public kind of forcing these companies in this kind of conundrum of staying in the status quo uh knowing that if they go public there will be you know some Carnage to kind of face given that they benefited from the overvaluations of the private Market kids over the last several years at least that's my uh you know interpretation of might be what what's going on and what's withholding people from you know jumping into what could be a much more positive situation for their company yeah it's it's it's a important aspect and I agree with you in the sense that you know the valuations had gotten so high and so overinflated and then there has to be if you're going to go out for another round there's going to be potentially an adjust M but more importantly the Market's going to seek its own level and then if you add in the complexity of shorting and naked shorting and machine trading uh it it gets you're exposed where if you stay private you don't have as much exposure you don't have as many variables you don't as long as you can access the capital uh then you know and as you look at it now as I see the IPO Market there's a pipeline of companies that are waiting yeah and and and this is really one of my messages to your listeners for anybody who's considering going public get ready now be prepared you know it takes 69 12 months to be ready right when the window opens here which we know it will Jason it's just a matter of time you want to be in a position to take a shot on goal and score yeah and if you're flat footed and whether that's in your private Equity side or or the VC or in your pathway to a liquidity event you could potentially miss the window so I'm a very big advocate for management to start now and use the time to prepare and even if you never go public your organization will benefit greatly from the practices you put into place and that's why I wrote the book that I wrote I want companies to understand the Practical nature and the benefits of being prepared and organized for an eventual liquidity event so I want to kind of get into what type of companies you know you're looking for and you think should pursue this option and start the process of getting ready but before I do I want to talk about kind of what happens to those early investors you know after the situation we just talked about and say this window does open People start you know going public those earlier investors that you know called the Angels the preed the seed round investors that got in real early um you know they're kind of at the bottom of the prep stack you know they as you say they're kind of locked up they have no control very little influence the company goes public you know most everyone's going to get converted to Common and most cases correct you know multiple share classes are pretty rare um what do you see typically happening to these earlier investors that have been locked up for five 10 15 years uh in comparison to those as you say fast money investors who come in last top of the prep stack and want to get out fast yeah it's one of the Dynamics Jason of the Capital markets and and and you know those last that last money in gets to kind of call the shots so what we see for the the shareholders that are the Legacy and the historical shareholders maximum is a one-year hold depends on the underwriter and how many shareholders and what the diversity is in the cap table to six months to in some cases could be three months it's a on a Case by case situation 6 months would be kind of more of The Sweet Spot and that's why when you see IPOs come out there's often a a window of being able to look see what happens in the six months when those lockups come off because then there then there's more sellers that come into the market and that's where you know you can see stocks get again Under Pressure where there's more selling than there is buying so you know a lot of investors look specifically for those time frames and and to be able to see where they fit for the sholders that got in early once that lockup is is taken off then they're in a position to be able to sell and and so you know again my practical advice for those investors is get all the paperwork and all the documentation that you need to be ready so then that leak when the lockup comes off you're in a position to liquidate should you want to and I think it's really important to understand and follow the company if you've been a shareholder for that long of a period understand how the company's performing what the key metrics are follow them track them and and don't be in a quick rush to want to sell just because of liquidity you believed in the company back then you know take a look and understand where the company's going are they on track to meet the growth Milestones which would ultimately increase the ROI for you as a shareholder being locked up is not necessarily a bad thing I know there's a negative connotation to it but like I it happens with me all the time and if I believe in the company from day one then I believe in it six months later 12 months later as long as that management has continued to form the way that they have when you bought into the company back in its early stages good Bas so let's talk about the types of companies that you think are good fit not just for you know your services and what you do at exchange listing but are you know a good opportunity at that kind of micro cap small cap range to go public what are you looking for in those companies you know it's a little cliche Jason but it starts with with the jockeys we're betting on manag you know when you have an early stage company whether it's outstanding technology service product you know they're all going to demonstrate similar characteristics that ultimate hockey stick growth and the ability to grow exponentially and build and provide an Roi and you can get a you know anywhere from a two to a 10 bagger you know that's kind of the the everyone's looking for the same thing we start with management and then the fundamentals um because we know that in earlier stage companies things go wrong markets change Industries change you know there's issues that they can control and those that they can't you know we're just coming out of you know just take covid it's like you know it had completely reshaped you know the face of what it could be for a trajectory for company for both good and bad so if you're focused on the management and you believe in the management and then build in the controls and the systems and the structures to support their growth track knowing that that may change that they may take on variables uh that's what we look for and obviously there are hot sectors you know we just did an AI deal we're looking at consumer product we're looking at Tech we're looking we're very big on life science you know a medical device uh happens to be an area I personally am interested in companies that are doing good in the world and are also ability you know capitalist right for for profit and and for you know a social good so you know I'm a capitalist and I believe me I'm I'm all about making money but at this stage it's the combination of those two that really get me motivated you know to work with Dynamic entrepreneurs you know Visionaries who have taken their company to a certain level and are ready to get into you know the next level of growth with a catalytic event and I I see what we do you know at miss our fund we consider it our Catalyst and that catalyst is to be able to give sometimes you know what I would call special situation Capital could be last mile Capital but it's it's critical to be able to get to the next event and so we invest as well in companies that we see with the right positioning and the right Capital behind them can make some exponential growth with that Catalyst being both the capital and the trajectory to lead them on to the senior Exchange Market no it's great to hear um just to you know put it you know clear to to the audience like you kind of gave like okay sector and you know but like what Milestones these companies need to be at like for the companies that you're working with are they doing you know five million Revenue 50 million of Revenue 100 million of Revenue does revenue even matter to you like what uh or what other kind of kpis matter to you when it comes to you know working with these companies and getting them ready to go public so we've done five we've done 50 we've done 100 million in Revenue so and we've done pre-revenue uh those are typically life science oriented Jason right so Medtech life science where you know they're developing their Pathway to to revenue uh for us it's really about market capitalization do they fit inside of a capital structure and do they have enough Traction in the market so I don't focus on Revenue focus on the overall value of the company as it stands today and where that value could be 12 18 24 36 months down the road and and then it's really from there what we do is we reverse engineer the requirements to meet an exchange so if we have bought into the company and we believe that this is the right candidate and they are committed and I I I emphasize committed because this is not for the faint of heart right you really have to be committed to want to go down this pathway uh then we partner with them and and I take Equity positions in these companies as a way of showing that we're really partnering it's not a transaction for me in a sense I'm a portfolio investor in what we do with our companies both with capital and with Services okay so that that helps kind of clarify quite a bit in terms of you know where companies might fall on line and in terms of uh pursuing this but from a you expense perspective like let's just say like a a consumer brand doing 20 something million a year in Revenue maybe markets are giving that one to 3x maybe forx multiple you know maybe that's somewhere the range of a micro cap um but it's going to cost money to play this game it's not going to be something that you know they can just show up and uh uh you get prepared do all the necessary prep and then you know actually run the process pay for all the legal investment bankers all kind like what what kind of cost go into this process from a company's perspective so there's a range Jason based upon you know the depth and the complexity of of the company and what status are their financials you know their audits have they been audited financial review so on and so on uh you know subsidiaries you know there's legal structure right so there are a lot of variables that go into that but I can give you a range uh a range would be probably a half million to a million dollar with with the way that we structure this because we're very frugal uh and and you know be very careful about the utilization of capital towards the cost of going public right and and and then there's a different carrying cost once you're a public company which could be a million to even $2 million dollars a year depending again on size complexity you know you have dno insurance reporting costs you know audits you know legal there's a whole extra burden so that's part of the decision making of is the reward of going public big enough to want to go through and and that's where our fund so at mems Capital we actually Provide Capital to cover those costs of going public because many of these companies at that stage of inflection don't want to take Capital away from their operations they want to put everything they have into growing their business and I support that wholeheartedly so how do you then prepare and how do you build that bridge and that's where this last mile Capital that we provide and then we bring in strategic Partners in the way of legal Investment Banking that are going to minimize the cost in the front end and be committed to the outcome on the back end so you have to be prepared to spend money there is access and unique cases to Capital uh that can help to cover those costs but if the company is well capitalized uh I would put together a budget of a half million to a million dollars to get you through the preparation you know the execution and leading towards I advise everybody to have two things when they go their process a healthy balance sheet and access to their own Capital to bring to the IPO gotcha so they they need to be bringing Capital to the table for the IPO they got to have some investors already teed up uh those are relationships already ready to go before you know coming to this process yeah mistake 101 that I made where I counted on the fact that the investment bankers even though I used to be one of them would be handling bringing all the capital uh in this market especially Jason the more capital and more support that the company brings issuer right stakeholders additional Capital the stronger they go into an IPO and there are some bankers that will actually almost mandate that from the company you know in order to be able want to take on and have a successful event because demand for a new issue can change but if you have existing supporters and you have existing capital and New Capital that's coming along with you it's it's a very simple adage right you're coming in strong as opposed to coming in you know in a in a weaker position than one would be ideal in this kind of marketplace you know I'm so glad you mentioned that part cu have a feeling there's a lot of people listening saying like this is my shot to break into new capital and I who pull the rug out at least at least they see it before it happens and they know they got to come prepared and uh you know they they gotta keep those relationships maintain those relationships and but like they those relationships might be there they're just not interested in investing as a private option but it was a public option they would be and um you know so that it could at least create a more Pro conversation for other investors but I think that's an important you know kind of caveat that you mentioned for for Founders to be aware of yeah I think it's critical Jason like Lessons Learned uh right so Pro tip is maintain a very close relationship with your existing shareholders constantly be building relationships with potential new shareholders and and more importantly to me is you know understand that this is a dynamic nature whether you're private or you're public you cannot have enough support from a shareholder base communicate with them regularly keep them updated you know share the wins and the losses you know none of us as CEOs are are perfect we all make blenders and mistakes own them communicate regularly build that support and the stronger you have that relationship with your shareholders the more sticky they are and and I think that that's something that you know many CEOs going into the public you know markets and the IPO don't understand and they don't necessarily even get to know the new investors and and I think it's critical when you're on a road show and you're interviewing investors they're interviewing you get to know them make sure that you have a good sense of who's going to be on your on your cap structure and in your cap table leading into the event the event itself and then manage your shareholder list thereafter with an understanding that your goal is to build the broadest most dynamic shareholder base you can as a public CEO that is incredible parting advice for for audience to be aware of and to start work you know maintain those relationships as early as now you know seed stage and on and you know never never let those kind of fall apart or falter and kind of maintain those relationships because that's also said the president for when you are you know public and and running a real IR process um so I appreciate you sharing those insights um Peter where can people learn more about you your book and your firms easiest thing is just just go to LinkedIn uh I'm very active on LinkedIn I like to give away a lot of content and value and information it's part of how I built a real strong Network around me so just look me up on LinkedIn and it's got information both about exchange listing and Ms Capital we're about to invite new accredited investors to Ms Capital so people can take a look at that we did a Founders round with phenomenal returns so I'm excited to be able to expand our our base of accredited investors uh and if you're interested in the dialogue with me just send me a direct message I'd be happy to connect with you awesome and uh any final words you want to share before we rewrap up today I I just I think you know you and I are aligned in wanting to bring knowledge and education and insight to the entrepreneurial Community you know when it comes to accessing different forms of capital and growing companies you know that's a a kindered spirit amongst fellow entrepreneurs so it's been great chatting with you you know I hope it brought value to the listeners uh and I look forward to you know ongoing conversation awesome I'm sure people loved it and uh you know look forward to people starting to reach out to you through through the podcast and uh you know being able to take lessons learned from from what you shared today great stuff thanks Jason thanks for listening to the show today we hope you learned something valuable and if you did be sure to let us know in the comments or by hitting that like button and if you're a Founder looking to raise Capital then join us at thunder. VC we provide a free tool to help you identify which VC family offices or lenders are the best fit for you using raai it will save you a ton of time from chasing the wrong investors and since launching our free tools Founders that have joined our Network have gone on to raise over 1 billion dollars in financing again you can find these free tools at thunder. VC and as a reminder we released new episodes every week so stay informed by subscribing to our newsletter at join . thunder. BC again that's join. thunder. BC and if you or someone you know has recently raised around and want to share your story please email me at Jason thunder. VC and that's our show we hope you enjoyed it and we see you next week