Taking Your Company Public Through the SEC’s Form 10

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“Known as the ‘General Form for Registration of Securities’, Form 10 is used to register a variety of securities for trading on U.S. stock exchanges. Information on SEC Form 10 includes the type and amount of security being issued, the financial information of the Company (known as the issuer), and any potential conflicts of interest that may exist. In addition to using this form for standard registration of securities, it can be used for accelerated and small business filings.” From: Investopedia


SEC logoSEC Form 10 is a source of information about a publicly traded security. Everyone from private investors to Wall Street analysts use a company’s SEC Form 10 to gather the information needed to make investment decisions. A thorough explanation of a company’s history, business, prior shares issued, and extensive financial statements are detailed. Form 10 describes management’s perspective on potential risks and opportunities facing their company.

For entrepreneurs with a young, dynamic company, filing a Form 10 with the Securities and Exchange Commission (SEC) may provide an alternative path to raising capital and public trading.

Although not an Initial Public Offering (IPO) in the usual sense, a Form 10 may be the most practical route to going public for some companies.

The traditional IPO route can be challenging for many entrepreneurs. It takes a long time to complete the IPO process and there is always a danger that market conditions will change before the company is ready to market the IPO to investors.

During an IPO process, companies with limited operating histories may face an uphill battle to convince investors of their valuation. Investors may decide not to accept the company valuation and refuse to buy into the IPO. At that time, either the IPO is abandoned or the valuation is revised, despite a lot of time and money spent in the process.

Form 10 has emerged as an alternative to a conventional IPO. While a reverse-merger transaction had been the primary means for entrepreneurs to take their company public if they could not complete a traditional IPO, new stock exchange listing standards for reverse-merger companies have made that path more difficult.board room meeting

A company that has successfully filed a Form 10 with the SEC may arrange to have its stock quoted on the OTC Markets and later seek to have its shares listed on a national securities exchange once it satisfies the applicable listing standards.

For a young company, the capital earned from selling its shares to the public can act as a major boost for growth of the business. Many investors prefer to invest in companies that offer shares that are traded on a public stock market, such as the OTC Markets.

OTC Markets is a United States financial marketplace, providing price and liquidity information for almost 10,000 over-the-counter (OTC) securities. The group is headquartered in New York City. OTC-traded securities are organized into three marketplaces to inform investors of opportunities and risks: OTCQX, OTCQB and OTC Pink (from: Wikipedia).

Filing a Form 10 with the SEC is one opportunity to take a company to the public markets.

And that may help entrepreneurs position their company for the growth capital they need.

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