UK Template Agreements and Sample Contracts
+44 (0)208 1441 123
support@templateagreements.co.uk
Twitter
0
Product was successfully added to your cart

Basket

  • Amendments
    • Amendment to Agreement
    • Termination of Agreement
  • Finance & Investment
    • Call Option Agreement
    • Loan Agreement
    • Partnership Agreement
    • Put Option Agreement
    • Shareholders Agreement
    • Subscription Agreement
    • Tenancy Agreement
  • Notices & Letters
    • Breach of Contract Notice
    • Letter Before Action
  • Trade & Operations
    • Director Service Agreement
    • Employee Handbook
    • Employment Contract
    • License Agreement
    • Master Services Agreement
    • Non-Disclosure Agreement
    • Settlement Agreement
    • Zero Hours Contract
  • Live chat with a UK solicitor

Is an IPO right for your small business?

30/09/2018David Church

Today, there are a record number of small businesses in the UK, and it is fair to say that they form the backbone of the UK economy. There is a conventional wisdom that businesses go through certain steps in their evolution, and much like a butterfly emerging from a cocoon, floatation on the London Stock Exchange is often perceived as the final step in achieving complete maturity.

If your small business has enjoyed steady and sustained growth, and you are looking to take it to the next level, the chances are, an IPO has done more than cross your mind. But before you start drawing up shareholder agreements and preparing for the due diligence, here are a few questions to ask yourself.

Why do you want to go public?

It’s a fundamental question, but if the answer is simply “because it’s the logical thing to do,” take a step back and think again. Over in the US, companies like Airbnb and Uber have resisted calls for an IPO, despite both having revenues in the billions.

A common reason is to raise funds, and that is fair enough – a public floatation will provide the money to finance growth if your market allows it. However, there are other ways of achieving the same objective.

Would other funding make more sense?

In the case of Airbnb and Uber, they preferred the control and privacy that private equity brings as opposed to an IPO. If it is just a case of raising funds, then going down a similar road, or seeking out a venture capitalist partnership will achieve the same thing, but without the public scrutiny and internal control obligations.

Of course, these are not for everyone, either. When venture capitalists are onboard, you will feel them at your back every moment, pushing you to push the business to its absolute limits. For some, that is exactly what is needed, while for others, it is a waking nightmare, and takes all the joy out of the enterprise.

Are you ready for the internal controls?

The world has learned from the horror stories of Enron, Barings and WorldCom. Today, the corporate governance rules for listed companies are taken deadly seriously and have to be rigorously applied. That means a proper board, audit committee, remuneration committee and all the rest.

Then there is the additional work that will land on your finance team, to provide regular updates for shareholders. Don’t misunderstand, extra scrutiny is no bad thing, but it does mean putting in the hours.

Is your business really ready?

If there’s one thing investors don’t like, it is surprises. For a business to be successful on the stock exchange, it needs high predictability and low volatility. Slow and steady growth, with realistic prospects of maintaining the same trajectory, are the order of the day. Anything less, and it might be better to park the idea for a while.

Floating on the stock exchange can be a great step for a business. But it has to be done at the right time and for the right reasons.

No sign-ups or subscriptions
Honest user
reviews
Up-to-date documents
Fast, secure payment
Edit
Print
Sign
Edit

All of our template agreements come in an easily editable format (.doc) and contain highlighted sections with helpful notes so that you can customise certain clauses to suit your particular circumstances.

Print

Once you have customised your document using our helpful highlights and notes, just hit print or save to PDF and you are ready for signing.

Sign

Simply sign the document along with the other parties and you have a professionally-worded, legally binding agreement.

Articles and resources

  • Handling Redundancies in a Small Business 02/06/2020
  • Acquisition Due Diligence Checklist 01/05/2020
  • 20 Random Ideas to Boost your Sales 07/01/2020
  • How to take your startup to the next level 16/09/2019
  • Tips for buying a business 19/03/2019
  • Establishing terms and conditions of business 21/02/2019
  • Dispute resolution tips for a small business 04/02/2019
  • What to do if your tenant wants to leave early 20/01/2019

Ready for your questions




Here if you need us

Plus Street Ltd,
Kemp House,
160 City Road,
London EC1V 2NX,
United Kingdom
+44 (0)208 1441 123
support@templateagreements.co.uk

Sharing the love

Twitter

The UK’s most popular

We are the UK's most popular vendor of template legal agreements, trusted by thousands of businesses every year.

Our templates are the cheapest of any available and, with the help of a leading UK law firm, the best quality too! Learn more here.

  • About us
  • Articles and Resources
  • Sample Agreements
  • Terms and Conditions
© 2015-20 Plus Street Ltd
Incorporated in England and Wales 09064120

We use cookies to ensure you get the best experience on our website. Click to learn more.