Preparing For An Initial Public Offering In The United States: Raising Capital in the U.S. Capital Markets
By Howard S. Zeprun and Adele C. Freedman of Wilson Sonsini Goodrich & Rosati
OVERVIEW
The U.S. public capital markets are the largest, most flexible and most attractive source of capital to companies raising money through the sale of equity or debt securities. In 1994, companies raised $66.5 billion in public equity offerings, including $23.2 billion raised in initial public offerings (IPOs). The equity markets have been particularly receptive to offerings by companies in technology, life sciences and other emerging growth industries. As a result, an increasing number of non-U.S. companies in emerging growth industries are recognizing the opportunity to raise money in an IPO in the United States, and to do so at a relatively favorable valuation. Companies considering an IPO can benefit from an understanding of the basic market dynamics, investor expectations, the public offering process and requirements imposed upon public corporations after the offering, as well as the corresponding implications for corporate governance, financial reporting, internal information systems, investor relations, corporate culture and management. This article is intended to provide, for companies who may be considering such an offering, an introduction to some of the issues that should be considered.
CANDIDATES FOR A U.S. IPO
Non-U.S. issuers that are particularly attractive candidates for an IPO in the United States are companies in emerging growth industries, such as information technology, telecommunications, life sciences and specialty retailing, in which companies generally may be expected to have a rate of ...