Because raising capital publicly is so complicated, you need the help of an experienced business attorney.Many federal and state laws regulate raising capital publicly and you must follow all rules.


You can find a qualified securities lawyer by contacting your state or local bar association and asking for a referral.You should call up the attorney and ask about his or her experience raising capital by using a public offering.
 When you go public, you typically give up a considerable amount of control.You need to discuss with your lawyer whether or not this is really your best option. The investors in your company will generally get substantial rights in how the business is run.


For example, stock holders typically elect your board of directors.
They also generally have a legal right to be informed of major business decisions or events. The shareholders also will be entitled to information about your business operations, financial condition, and management.Shareholders can also sue you if you do not adequately share this information.They also might insist that your salary be capped., Your lawyer may need to prepare a registration statement and file it with the Securities and Exchange Commission (SEC). You can use Form S-1, provided by the SEC, for this filing. The registration has two parts:Your prospectus. This is sent to anyone who purchases your securities or who makes an offer to purchase them.
Other information, including material contracts.
 Before raising equity capital from the public, you must draft a prospectus as part of your initial public offering.The prospectus will contain the following information:a description of your company (its business, properties, and competition)
an explanation of the risks investors face if they invest in your company
financial statements which comply with Generally Acceptable Accounting Standards (GAAP)
an analysis of your company’s results and financial management
the names of your company’s officers and directors, including information about their compensation
any material transactions between the company and its officers, directors, or significant shareholders
any lawsuits the company is involved in

, If you are a company with less than $50 million in public revenue, or if you have less than $75 million in securities, then you can prepare your prospectus using different requirements.The reporting process is generally less burdensome.


Your lawyer should understand what the requirements are if you are proceeding as a “smaller reporting company.”
Generally, you will need to make less extensive narrative disclosures, in particular related to executive compensation.
You also will need to provide audited financial statements for only two years (instead of the usual three).
 Your lawyer will file the registration statement with the SEC using its website. Most registrations are made public.The SEC staff then reviews your registration statement to make sure that it complies with federal law. If the provided information is incomplete, then SEC staff will send you a letter requesting further information.
 One or more investment banks actually sell the stock to the public.You will need to hire the investment bank.


You can get referrals from your securities lawyer, who should have worked with many different investment banks before. Be sure to get a referral to a bank that has handled public offerings in your industry.
You can then get references from the bank. Call the references and ask if they would recommend the investment bank.Also ask what they liked and what they didn’t like about the bank.
 Securities laws allow investors to sue if you make misleading statements in connection with the sale of securities.These lawsuits can be financially damaging.


One way to protect yourself from this kind of a lawsuit is to encourage potential investors to meet with their own advisor or lawyer before investing in your company.
Hire a lawyer.
Discuss whether you are comfortable losing control.
Prepare a registration statement.
Draft a prospectus.
Make disclosures if you are a smaller company.
File your registration statement.
Hire an investment bank.
Encourage investors to meet with legal counsel.
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