Advantages and disadvantages of issuing shares in your company
There are business benefits of issuing shares in your company but you should also be aware of potential drawbacks.
Issuing shares in your company on a stock market can provide the following benefits:
- new finance
- an exit for founding investors who want to realise their investment
- a mechanism for investors to trade shares
- a market valuation for the company
- an incentive for staff using shares or share options
- an acquisition currency in the form of shares
- a way to raise your business' profile
There are also some potential drawbacks to issuing shares:
- diluted ownership
- reduced control of your business
- loss of privacy
- administration costs
- you may have to offer a monthly or quarterly dividend to investors
- you may require the services of a solicitor or accountant
Find more information on business angels and venture capital.
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