Pros and Cons
The advantages of a direct public offering include: broader access to investment capital, the ability to utilize stock to complete acquisitions and stock options to attract and retain employees, enhanced credibility and providing early investors with liquidity.
The disadvantages of a direct public offering include: the company must raise its own capital without the assistance of professional financiers, the process has significant cost which offsets any capital raised, it takes management time and attention from business operations and there are ongoing financial and legal reporting requirements.
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“Quite generally, the familiar, just because it is familiar, is not cognitively understood. The commonest way in which we deceive either ourselves or others about understanding is by assuming something as familiar, and accepting it on that account; with all its pros and cons, such knowing never gets anywhere, and it knows not why.... The analysis of an idea, as it used to be carried out, was, in fact, nothing else than ridding it of the form in which it had become familiar.”
—Georg Wilhelm Friedrich Hegel (1770–1831)