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boost your balance sheet prior to your IPO- Since you’ll raise significant capital in your IPO, it may seem
counter-intuitive to seek cash beforehand as well. It’s critical that
you not have any obvious points of possible failure however.
Public investors are unaccustomed to funding operating losses. If you need
the cash you propose raising in your IPO, public investors are prone to
either shy away or seek a very aggressive valuation. Commencing your
IPO with full coffers will give you a position of strength as you
approach public investors, and most will be more comfortable knowing the
cash they’re investing isn’t critical to fund near-term operations.
Please let me know if you need any clarification. I'm always happy to answer your questions.
Dec 13th, 2015
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