The road to an initial public offering, or an IPO, can be long and winding, let alone a real distraction for a company trying to deliver its breakthrough products in a highly competitive environment. And at the end of that road, the company may end up raising less money than it could. Lately, some wealthy investors are using an alternate route to provide promising companies access to the public markets -- and giving individual investors another way to get in on the ground floor.
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After filing its first set of forms with the Securities and Exchange Commission, or the SEC, a typical company will spend the better part of a year getting ready for and promoting its upcoming IPO. Throughout the process, the whole company's executive team works nonstop to satisfy the SEC's filing requirements, and to put together its "roadshow" -- a series of meetings designed to attract large investors. Many companies find it difficult to commit this level of resources to the IPO process without derailing key corporate priorities.
Source Fool.com