Taking the Mystery Out of Taking a Company Public, an Interview With Bruce Berman, CEO and Founder of GoPublicNow.com
By Tiffany Eason (email@example.com)
Taking a company public in this roller-coaster business landscape is a complicated gamble and before you throw the dice you are no doubt asking countless questions. How do you know if your company is ready to go public? What are the benefits? The drawbacks? Who do you talk to? Where can you go for funding? Let's say, for instance, you believe you aren't ready to go public…yet…how do you prepare?
One place to go for answers is GoPublicNow.com ( http://www.gopublicnow.com). Founded by Bruce Berman, the site is an enormous information source that can help you every step of the way. To begin with, it offers a unique, individualized set of questions to determine whether a company is ready to go public.
Although you must register, at no cost, to get the information you're looking for, you can still obtain a great deal of detail without doing so. The site includes a glossary of an extensive list of business terms. A ticker at the bottom of the page allows you to keep your eye on stock prices. The home page is constantly updated with news items.
CEO Bruce Berman is a finance guy. He knows how to take companies public and has the resources at his fingertips to do so. Whether it was on the golf course or sipping a martini at a cocktail party, he was constantly being asked how to take a company public. Now he says: Go to my Web site.
The company's headquarters, located in Newport Beach, are somewhat disheveled: the mark of a workplace where the 22 employees (at last count) actually work. ``Action: Not results" is scribbled large on his chalkboard and there is golf gear all over his office. His methodology is simple: work hard and the results will come.
Bruce and his idea for GoPublicNow.com are the perfect example of taking an idea, putting it on paper and making it happen. Four months to the day of opening the doors, he took GPN public. He hopes numerous strategic relationships and his long history in the finance business will rocket GoPublicNow.com to the top.
WWWiz: Bruce, who are you and what is your past work experience?
Bruce: In the early 70s, I went to work for my father at a finance company. I started as an errand boy and moved up the ladder as a credit checker, collector, credit processor, then worked into sales and management. So basically, Dad taught me the finance business. I wanted more responsibility so I started my own finance company in Newport Beach with $2,500. For the most part, we were in the equipment leasing business. We used to lease office equipment for startup businesses. It became a $20 million company within the first year.
In 1983, Richard Nixon's nephew, unfortunately the black sheep of the family, came to see me regarding the financing of a windmill company. I liked the business, but didn't like the people and ended up being one of the guys who started the windmill business out in Palm Springs. I realized that what was needed was financing and put together a business plan. I started the company for $50,000 and quickly moved it into a quarter-million-dollar-a-year company. This lasted until tax laws changed and interest rates dropped dramatically in the 80s. Then I basically took my talents on the road and became a financial consultant; raising money, building companies, understanding companies, acquisitions, international finance. This all led to what I do now: I assist companies in going public. With GoPublicNow.com (GPN) and its Internet capabilities, I'm able to assist numerous companies a year in going public, as opposed to the one or two I was able to do before.
WWWiz: What differences do you see in building a business in the Internet world?
Bruce: We are a brick-and-mortar company and plan to acquire more brick-and-mortar types of businesses. The Internet simply allows us to bring more people together. It entitles us to vastly broaden our landscape in a cost-efficient manner. It's a great tool for us to find investors, fund sources and service providers. It gives us room to constantly expand.
WWWiz: What kind of marketing are you doing for GPN?
Bruce: There are three parts that make us work. One, we need companies. Two, we need service providers (i.e. lawyers, bankers). Third, of course, is the money. It's amazing; when you have the money, everyone else comes. We just got back from a road show in Florida with 500 investment bankers as attendees. This is key for us. Members of this organization represent about 80 percent of the money that goes into the companies that we target. So our strategy is a bit traditional–road shows, conventions, etc. As for the other side of our marketing, we just started to roll out some print media, although we're still testing the waters. With the nature of what we do, targeting is very important to bring in quality companies and service providers. Since we started in December, we have been out-calling, making personal contacts and building a database of qualified service providers. As soon as the stock market turns around, I'll use that as a tool as well. There is just no sense in wasting money in that direction with today's market.
WWWiz: How did you get the money for this project together so fast?
Bruce: December 7, 1999. That's the day. I went to see my friends over Christmas, showed them what I was thinking and asked them what they thought. I raised $1.5 million between Christmas and New Year's…something unheard of in my business considering it's the slowest time of the year. I soon realized that I needed more money than what was in my business plan and raised another $2 million. I've been in this business a long time now and I think people who gave me the money believed in me because of my track record. We went public April 7; four months to the day of when we opened our doors. I can't call myself GoPublicNow.com and be a privately held company. Obviously that doesn't make sense. I consider myself our best success story.
WWWiz: Is GPN the only company that GPN has taken public so far?
Bruce: Yes. We just started accepting companies a few weeks ago. We went out first to business providers and told them it's going to be six months to a year before you see something from us. So we've built this network of consultants and we've built the money network. I like to work with Orange County companies. I'm a kick-the-tire sort of guy; look me in the eye and I get a feel for someone. The companies want the money but they don't want to do the work. I tell this to my employees all the time. There is a curve. When you first sign a company up to go public, they are the most cooperative people in the world. When they get their first round of financing, they get a little cocky. Then after they go public, it's like, ``Oh man, we could have done this without you! I should have used my cousin who works at Smith-Barney. Everyone loves us. What did we need you guys for?" With millions of dollars at stake, it's just the way it is.
WWWiz: When you take a company public, what exactly is involved?
Bruce: We introduce a company to our service providers. We create the business plans and the Power Point presentations. We put everything together. We outsource all of this. We pre-screen all of the people who work with us on this. Our revenue is really driven from the acquisition of companies, so we are very careful that the services we provide have great value. This is the way I look at it; 1 to 3 percent of three or four Microsofts is a giant piece of the pie.
WWWiz: Do you take cash in some cases?
Bruce: I don't take cash. By coming to us first, you're basically hiring all of our talent and resources and our ability to structure for 1 to 3 percent of your company, depending of your stage of development. We usually get companies to go public for a lot less money than it would normally have cost them, simply because we know all of the pitfalls. Our model is set up to reduce the pain but we want to make it on the good ones. It's a win-win deal. Everyone makes money.
WWWiz: Is it easier to take a company public when it has no background or history?
Bruce: It's difficult to takeany company public. It's quite an art believe it or not. It doesn't really depend on your background. It depends on your future and what you have in place. I look for companies that will expand with rapid growth; zero to $100 million in three years. I look for companies that have management in place. I look at companies that actually have a proven market in which to target.
WWWiz: How did you choose the name GoPublicNow.com?
Bruce: I'll tell you where it all started. I was getting a DSL line hooked up in my office one day and the guy says to me, ``What do you want for an address?" I walked out the door and yelled from the hallway, ``GoPublicNow.com." I get down the hallway and say, ``That's it. I'm going to take companies public over the Internet." I started to put it on paper and it made sense. People in social situations would constantly ask me questions about going public. Well, I developed a series of questions that would determine whether a company is qualified to go public. Instead of taking an hour to talk with someone about their particular company, I simply refer them to my site. Just hit ``Do I qualify to go public NOW?"
WWWiz: What are your goals with GPN?
Bruce: Our goal is to be the single-source answer on going public. We are planning on acquiring a securities firm (negotiations with So Cal Securities are in the works). We plan to do online trading. If you don't know where to go, come to us and we will help you. We build relationships and bring people together. Go to GPN and we will show you, take you, assist you and send you on the road to go public. We want to be the search portal for going public.
WWWiz: Who are your competitors?
Bruce: You know, we don't have any competitors. I don't look at anyone as a competitor. If you're an incubator, I welcome you to come to our site. If you want to invest in one of our companies, good. Go for it. I already own my 2 percent; I don't care what you do. We have what I call a ``Competitionless-model." If someone started GoPublicNow2, I wouldn't even consider it a competitor. We could bring each other business. Everyone just adds value.
WWWiz: How do you find the people you need to staff this project?
Bruce: Ironically, this is what I've been doing for other companies. I find a small company and I help them find management, a board of directors and find acquisitions. I find these people through strategic relationships.
For GPN, I've personally had a lot of success with headhunter sites and job sites such as Monster.com. We have some growth problems right now because we are growing so fast. We are looking for a much larger location so we can bring in other companies and become an incubator.
WWWiz: What's a typical day for you?
Bruce: I get up around 5:30 a.m. and watch the first half of CNBC. I'm in the office around 6:30 or 7. I start returning East Coast and overseas calls. I return a lot of emails. I start roaming through various meetings that are scheduled for me. I don't like to travel. I'm the guy who likes to be here hands-on, so everybody travels but me. I review the data from the Web site everyday. I eat lunch at my desk. I leave about 5:30. I go to the gym or go home. At night, I get on the Internet and work with the email. I feel that I get light-years ahead if I take that time. I'm in a workaholic mode. I have a plan that I really want to execute.
WWWiz: Are you a California local?
Bruce: I was born in Philadelphia, but I'm deep-rooted here in Orange County. My neighbor, Henry T. Nicholas, is the founder of Broadcom.com. He has really inspired me. I've watched him and he's just a regular guy like me. He had good companies, making a good living and one day a couple of them went public and he became one of the richest men in the state.
WWWiz: What is your plan as far as acquiring and partnering with other companies?
Bruce: I'm an acquisition believer. If I can hypothetically buy a company for three-to-five times revenue, public companies are valued anywhere from 40 times and beyond. We need to own a security company but we don't want to own someone else's problems. We were looking for a small securities company to basically get their license. I intend to acquire companies with the public stock but we are going to wait until the market is in a little better condition.
WWWiz: Do you have any heroes in the business world?
Bruce: John Crean. He's an Orange County guy who gives so much to the community and is a generally happy guy. What's the point of making a ton of money and being miserable! My dad died at 57. He died before he enjoyed the fruits of his labor. So my goal is do well and actually have a life. I'm a fan of the hardworking, built-it-from-nothing-without-someone-else's-money type of business.
WWWiz: What happens to the companies who don't pass your basic test for going public?
Bruce: I learned a lesson a long time ago about leaving money on the table. We created GoBizNow.com (http://www.gobiznow.com) of which I'm the chairman. We basically created this company for all the businesses that aren't ready to go public. Ninety-nine percent of the people who go to GPN's site will not qualify. If you can't go public, what can you do? You can sell your business. You can merge your business. You can grow your business. With GoBizNow.com, we can help with any of these three. It's the same business model, but set up for individual businesses. Our premise for GPN is that we should have your business ready to go public within 18 months at the most. With GoBiz, we'll nurse you along until you're ready to go to big brother. We plan on taking GoBiz IPO in about 18 months.
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