It’s the dream of many startup founders to one day hold an initial public offering (IPO), the ultimate signal that they’ve made it. But when should you go public, if at all? Here are six signs that an IPO makes sense for your business.

1. You’ve Solidified Your Business Model

When you’re a young company that’s moving fast, an IPO might not be the best choice, says Marc Prosser, cofounder and managing partner of Marc Waring Ventures, a firm that develops specialty Internet properties such as Fit Small Business for high-value audiences. It can be difficult to continue with normal business operations while preparing for an IPO, especially if your “normal” means frequently adapting to new opportunities and changes – common for a young startup, but different from how a mature company operates.

A startup might make decisions based on its founders’ ideals. The market provides feedback on those decisions, and the founders, assuming they want to stay in business, adjust their plans accordingly. Founders have to expand their expertise beyond the subject of their business and into the subject of business itself, or hire others who have that expertise. A mature company has already discovered what works, and if it’s testing new ideas, those are side projects, not the company’s core activity. Also, it’s usually no longer the founders who are driving the decision-making.

“Once your business model is well-defined and your pace of new initiatives slows, you can consider a public offering,” Prosser says. “As a settled company, you know what works and don’t have to constantly try new ideas to figure out how you’ll make money long term. At that point, you should be able to plan your new initiatives with some degree of certainty. From there, you can set aside some time to prepare for and make an initial public offering.”

2. You Can Afford the Regulatory Headaches

Preparing to go public takes a lot of time, energy and money – and none of that will change after the IPO. One of the main reasons for this ongoing commitment is the requirement to comply with the many regulations that apply to publicly traded companies. Your company will have to prepare reports and SEC filings on a regular basis and undergo audits. You’ll need to hire additional staff or contract with outside firms to deal with this extra work. But despite how much you’ll be delegating, as the CEO you’ll still be heavily involved in the process.

“Be prepared to spend a lot of time with bankers crafting IPO documents,” Prosser says. “I'm talking hundreds of hours involving your CEO, CFO, COO and other key members of your management team. If your executives are already heavily engaged in running the company, they’ll be hard-pressed to keep up those efforts while turning their focus to an upcoming IPO.”

3. You’re Ready to Communicate Carefully

As a private company, you can talk about company business with anyone you want, whenever you want. You’re concerned with protecting trade secrets and other information you don’t want competitors to learn, but that’s nothing compared with the communication restrictions you face when you decide to go public. Also, when you’re private, jail time for illegal insider trading isn’t a possible consequence of sharing information related to the company’s future performance with the wrong person at the wrong moment. It is when you’re a public company.

Corporate insiders such as directors, executives and major shareholders who have nonpublic information that, if public, would influence the company’s share price have to be careful about how they share that information and how they buy and sell stock when they have that information. Even noninsiders can commit this crime if they act on information they’ve learned that isn’t public. (Learn more in What exactly is insider trading? and Defining Illegal Insider Trading.)

The restrictions on communication are yet another thing that will take up your time and slow down your company while incurring new expenses, Prosser says.

4. You Can Afford to Think Short Term

Most tech companies these days prefer to stay private as long as possible, says Mike Ser, an active trader, trading coach and entrepreneur who cofounded Ser Man Traders, a company that trains people to become professional traders.

Just look at Uber, which has been around since 2009 and hasn’t yet announced plans to go public (though there are rumors it could happen next year), and Facebook, which was founded in 2004 and didn’t go public until 2012.

Staying private allows the company to focus on building its business long term rather than on a quarterly timeline.

Public shareholders aren’t always thinking about the long run, though. General investors will be constantly worried about the value of their shares today; most people aren’t good at buying and holding through good times and bad. With your company’s stock price available 24/7 and subject to constant scrutiny from investors and the media, you might find yourself making decisions that make your company look good in the short term to keep the stock price up and keep those quarterly earnings reports looking good.

You’ll have to find a balance, though, because if you never think about the long run, you’ll end up going under. (To learn more, read Strategies for Quarterly Earnings Season and Everything Investors Need to Know about Earnings.)

5. You’re Ready to Be Accountable to the Public

Closely related to having to focus more on the short term is facing a new level of public scrutiny and being accountable to your shareholders and to public opinion. You’ll be limited in the risks you can take – failure becomes a luxury you can’t afford.

“As a young, fast-moving company, you try a lot of different ideas and expect many of those to fail. And you understand that failure is nothing terrible,” Prosser says. As a public company, however, “a failure that wouldn’t rattle you before could cause a stock hit that will shake public confidence in your company, which is an entirely different scenario from the upstart that tries ideas just to figure out what works and what doesn’t.” (For related reading, see How the Power of the Masses Drives the Market and Understanding Investor Behavior.)

Not only does your strategic focus have to shift once you’ve gone public, you also need to have an excellent public relations team, if you don’t already, plus an investor relations team. Reputation management is an ongoing task. While there are ways to retain control over your company after going public, common shareholders and corporate board members typically have a major impact on a public company’s decision-making, as does public opinion. (See Investor Relations Counts to learn more.)

6. You Want to Grow the Business Dramatically

Ser says the types of companies for which it makes the most sense to go public are those that want to grow through the acquisition of other businesses. Being public means they can use their share structure to easily buy other companies. They can also use stock options to recruit and retain key employees.

One example of a company that has used its stock to make acquisitions is Facebook. In 2012, it purchased Instagram for $300 million in cash and $700 million in stock. In 2014, it acquired WhatsApp for $4.59 billion in cash and 178 million shares of stock, worth about $17.21 billion, for a total of about $21.8 billion, according to Reuters. When you add up all the acquisitions Facebook has made both before and after it went public, the total is more than 50. (Learn more in Facebook's Most Important Acquisitions.)

The Bottom Line

Going public can bring in a big pile of cash to fuel your company’s growth, but it also means giving up some of the risk taking that comes with being a startup and dedicating massive resources to accounting and disclosure requirements. It also means you have to be careful when discussing anything that could be considered insider information and be accountable to the public for every decision.

Another possible result is losing control of the company you started. To forestall that, read Keeping Control of Your Business After the IPO.

“The upside of this is that you’ll get a ton of free media coverage as a publicly traded company. You’ll also get instant credibility with customers, investors and business partners,” Prosser says. “Nothing says you’re an established company like an IPO.”

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