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Economic Development Office

Tri-Cities Tech Business Update

September 2013 Issue

Seeking Capital? Why Not Try a 'Direct Public Offering'

Finding capital to start a new company can be frustrating and tough. In order to make their goals, a few entrepreneurs have turned to a "Direct Public Offering" (DPO). In a typical initial public offering (IPO), a Wall Street underwriter markets shares to wealthy clients and institutional investors, taking a cut of the proceeds. In a direct offering, shares are marketed directly by the issuing company, typically to customers, supporters and, these days, social media followers. The process requires a lot of time and effort to deal with the hundreds of potential investors but costs considerably less since the middle man is cut out. Companies like Ben & Jerry's and Annie's Homegrown have used this method successfully to raise funds when they first started out. Read more...


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