ABSTRACT
Not every company represents a viable candidate for pursuing an initial public offering (IPO) or a merger and acquisition transaction. The decision to undertake an IPO or to enter into acquisition negotiations oftentimes will be done over many months, if not years. And a number of key factors must be examined before any company definitively decides to pursue either of these transactions. The IPO or an acquisition presents company with new strategic opportunities and challenges. An IPO may increase the publicity and stature of company, resulting in new customers, employees and joint ventures. An IPO and a sale of the company may both provide company stockholders with the ability to “cash out” their shares of stock, but the sale of the company liquidity usually will allow the stockholders to receive cash for their shares more quickly. For IPO candidate-companies, the business model must make sense to investors who may be unfamiliar with certain technologies, markets, or customer bases.
