On the day Tyco Laboratories (see Chapter 1) went public, Arthur Rosenberg was ecstatic. Now he had a company to run. In his unusual case, going public provided the funds to buy his research laboratory from its parent corporation. On the day SofTech went public, Doug Ross was also ecstatic, but for the more usual set of reasons. Now his growing firm had the funds to help finance its efforts to build its microcomputer software product line. But in addition Doug had also realized about $600,000 in cash from the offering and had remaining shares valued at the public market offering price at $4 million.
For many technological firms going public is a logical step in their continuing growth. The capital made available from the public offering helps fund accelerated product development programs, enables the broadening of their distribution channels, and generates financial strengthening through debt retirement. Yet success is a many-colored fabric. To some technological entrepreneurs "going public" is success, not just part of further "growing up". As one entrepreneur philosophized, "I built this company up from scratch, made it profitable and growing, and brought it public. Now it's time for me to step aside and let these other fellows run the company." Especially from the perspective of personal fulfillment, bringing the firm from being privately held into public ownership, with the company's stock traded and reported daily (more-or-less), engenders strong feelings of pride of accomplishment. For those entrepreneurs with high n-Ach, going public creates new tangible measures of attainment.
Whether another part of corporate growth or a first measure of company success, personal financial success of the entrepreneur is also usually solidified, and even somewhat enhanced, by going public. Some of the entrepreneurs sell a portion of their ownership as part of the initial public offering and transform paper wealth into cash. These and other entrepreneurs, as well as the early investors in the company and the usually many stockholding employees, soon begin to sell portions of their stock into the public market, as allowed by the Securities and Exchange Commission (SEC) regulations. The realized liquidity of their previously illiquid assets generates for many of them thousands and even millions of dollars. For all entrepreneurs and their stockholding associates, going public makes the paper assets they still hold much more real, valued tangibly by an existing