In a direct public offering, your business raises capital by marketing its shares directly to its own communities--such as its customers, employees, suppliers, distributors and neighbors. DPOs are an alternative to underwritten public offerings by securities broker-dealer firms, in which a company's shares are sold to the broker's customers and prospects.
What Are the Advantages of a Direct Public Offering?
In a DPO, you control your shareowner mix by targeting the specific communities that place the highest value on your products, beliefs and prospects for the future. This is particularly important if you don't want to be pressured to compromise your values and ways of doing business. DPO's offer a competitive advantage in the marketplace by strengthening customer loyalty.
Direct public offerings are considerably less expensive than traditional underwritten offerings, and don't have the restrictions that are usually associated with bank and venture capital financing. DPOs can be cost-effective for offerings as small as $500,000.