By David Diamond, CPA
In the wake of an increasingly improved economy and a strengthening stock market, many private biotech companies have either initiated the process of going public or are at least contemplating it. Millions of dollars are being raised, sometimes at nose-bleeding valuations that defy gravity.
It is in this climate that private companies looking to go public should be very wary. If they want to go public, they should be aware of very significant pitfalls that lie in wait, regardless of how they approach the offering. We have seen in our practice the gamut of biotech companies raising tens of millions of dollars becoming publicly traded, while others have crashed and burned as a result of bad advice, poor handling, or the wrong methodology to enter the public markets.