๐‡๐จ๐ฐ ๐ญ๐จ ๐œ๐ก๐ž๐š๐ญ on ๐ˆ๐๐Ž?

If your company, C, goes for IPO, i.e. give out stocks to the public, it will be subject to close scrutiny from then on

For ex, you have to report Quarterly earnings. If things didnโ€™t go well, you have to answer to the shareholders

๐€๐ง๐ฒ ๐จ๐ญ๐ก๐ž๐ซ ๐ฌ๐จ๐ฅ๐ฎ๐ญ๐ข๐จ๐ง?

What if there was a dummy company, D, that went for IPO?

This dummy company, then acquires/merges with your company..

Now, the regulators like SEBI arenโ€™t behind you as much..

This dummy company is called ๐’๐ฉ๐ž๐œ๐ข๐š๐ฅ ๐๐ฎ๐ซ๐ฉ๐จ๐ฌ๐ž ๐€๐œ๐ช๐ฎ๐ข๐ฌ๐ข๐ญ๐ข๐จ๐ง ๐‚๐จ๐ฆ๐ฉ๐š๐งy (๐’๐๐€๐‚)

๐๐ž๐ง๐ž๐Ÿ๐ข๐ญ๐ฌ?

1. You avoid legal documentation work like Red Herring Prospectus, checking of previous yearsโ€™ financial report

2. Avoid getting vetted by bankers

๐๐ฎ๐ญ, ๐–๐ก๐ฒ ๐ฐ๐จ๐ฎ๐ฅ๐ ๐ญ๐ก๐ž ๐ฉ๐ฎ๐›๐ฅ๐ข๐œ ๐›๐ฎ๐ฒ ๐ฌ๐ก๐š๐ซ๐ž๐ฌ ๐จ๐Ÿ ๐ƒ in the first place?

Because, it gives you the power to take part in a ๐๐ซ๐ข๐ฏ๐š๐ญ๐ž ๐„๐ช๐ฎ๐ข๐ญ๐ฒ like transaction

๐’๐ญ๐จ๐ซ๐ฒ

Chamath Palihapitiya, a venture capitalist, set up โ€œSocial Capital Hedosophia Holdings Corp IIIโ€ (SPAC)

This company went for IPO & raised $720 million

Then, it merged with Richard Bransonโ€™s โ€œVirgin Galacticโ€

Virgin Galactic is now a public company, without actually being a public company

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Writes on Venture Capital, Startups

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Kaushik N

Kaushik N

Writes on Venture Capital, Startups

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