How to Get Your Company on the Stock Exchange
Getting your company on the stock market requires a process called underwriting. Underwriting is when an investment bank goes out and attempts to get investors to purchase the securities (stock) of your company. It is through this underwriting procedure that a company goes from being private to being publicly traded on one of the stock markets.
Hire an investment bank. Examples of reputable investment banks are Goldman Sachs and Morgan Stanley; however, others are available to do the same work. The investment bank increases the chances of your company appearing on the stock market because they are able to create more appeal and get the paperwork with the Securities and Exchange Commission (SEC) done more efficiently.
Meet with the bank and go over details about what type of security you're going to offer (stock) and the amount of money that you ultimately want to raise. It's during this meeting that you and the bank will decide if the bank will provide a firm commitment or a best efforts agreement. A firm commitment is when they guarantee the sale of a certain amount of securities. A best efforts agreement is where the bank sells the stock but doesn't make any guarantees on the amount sold.
Draft the registration statement for the SEC. They are the deciding factor on whether your stock can go on the market. The SEC will review financial statements, management background, legal problems (if any exist), what the money will be used for, and insider holdings.
Put together the red herring. While the SEC is processing your registration, go around with the investment banker trying to create hype in the stock. At the time, you don't know when the release date is, but you try to sell the stock to investors before it even hits the market so that it starts off strong and the price can rise faster.
Pick a price for the stock. Because the ultimate goal is to make the most money, the higher you start, the more you'll make per share. However, the investment bank and you can figure out exactly how much to charge per share so that you maximize the amount of money coming in.
Track the stock on the market. It will fluctuate up and down, but as shares are sold, the money will be given to the company so that it can further invest it to make the company stronger.