Gregg Jaclin, Managing Director at Exchange Listing LLC, has a straightforward approach when evaluating potential clients. The first thing he asks about is their financials, as a company that can’t produce clean audited statements is unlikely to go public. The second question is more telling: he wants to know why they want to go public.
Most founders answer with a number, indicating they want to raise capital. However, Jaclin believes this is often an incomplete reason, as companies that only need money have alternative options, such as private markets.
A better answer, according to Jaclin, describes what a listing produces that nothing else can. He argues that there are four reasons to go public, and the first three are the ones founders typically believe in: access to institutional capital, improved valuation and liquidity, and increased credibility.
The fourth reason is different in kind: a listing creates strategic currency, a publicly priced security that functions as a platform for mergers and acquisitions, employee incentives, and long-term growth. This concept is key to Jaclin’s argument, as it provides a tool for companies to execute their growth strategies.
Jaclin’s own case for moving Exchange Listing to Nasdaq or the New York Stock Exchange rests on these four arguments. He believes that a company pursuing institutional capital and nothing else has a financing objective that can often be met by private markets. However, a company that needs strategic currency has an objective that private markets cannot meet.
One of the primary uses of strategic currency is for acquisitions. Jaclin notes that a private company buying another private company often pays cash it may not have or issues paper that cannot be priced by the seller. A listed company, on the other hand, can offer stock at a market price, making acquisitions more feasible.
Jaclin has a test for whether a growth plan is real: if a company can use the money to grow its business and back it up with a solid plan, then he’s comfortable bringing them to market. He recalls his work on the La Rosa Realty listing, which brought a holding company for five agent-centric real estate businesses onto Nasdaq.
Company president and CEO Joe La Rosa said securing the Nasdaq listing was a significant milestone for the company. Jaclin assisted with the acquisition work behind the roll-up strategy alongside the listing itself, demonstrating the importance of strategic currency in executing growth plans.
Jaclin’s practice covers a wide range of clients, from private companies preparing for an IPO to public micro-, small-, and mid-cap companies trying to reach a senior exchange.
When a company needs acquisition currency, the route to going public matters less than the outcome.
Strategic currency is acquired alongside a set of permanent obligations, including quarterly reporting, an independent board, and public disclosure of executive compensation. Jaclin describes this as a second job that companies take on when they list, which can be a tool that buys a company what it genuinely needs or overhead attached to a tool sitting unused.
Ultimately, Jaclin’s argument is that a founder should be able to name which reason they’re buying when going public, and that the answer predicts most of what happens next. By understanding the four reasons to go public and the importance of strategic currency, companies can make informed decisions about their growth strategies and choose the path that best suits their objectives, similar to how they would craft a compelling press release to reach their target audience.
Jaclin’s approach emphasizes the need for companies to have a clear understanding of their goals and objectives before going public. This understanding is key in determining the best path forward.
As the outlet reports, the decision to go public is a significant one, and companies must carefully consider their options. Jaclin’s expertise in this area provides valuable insights for companies looking to handle the complex process of going public.
By considering the four reasons to go public and the importance of strategic currency, companies can make informed decisions about their growth strategies. This, in turn, can help them achieve their objectives and succeed in the public market, much like the FDA’s approval of new treatments can have a significant impact on the pharmaceutical industry.
