Tyler WagnerFounder, Authorsunite.com · Authorsunite.com and Partnerprofits.io Founder - #1 WSJ Bestselling Author - Book Publisher - Book Marketer - 4,000+ Authors Served - Millions Of Books Sold By Clients - Investor

Jeremy Harbour: How to Become A Public Company | The Authors Unite Show #950

Name: Jeremy Harbour: How to Become A Public Company | The Authors Unite Show #950
Uploaded: 2020-11-04T14:35:05+00:00
Duration: 2 min 13 s
Channel: Tyler Wagner
Description: In this interview, Jeremy Harbour explains how small‑to‑medium private firms can capture many of the advantages of being a public company without…

4 Nov 2020 · 2 min

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2:13

In this interview, Jeremy Harbour explains how small‑to‑medium private firms can capture many of the advantages of being a public company without undergoing a traditional IPO. He describes a large valuation arbitrage between private firms and larger public entities, noting that bringing a new company into a public‑listed holding dramatically expands the overall market value. The public status provides credibility through full transparency of accounts and ownership, which makes it easier to win customers and negotiate M&A deals. Harbour highlights that a public company can issue tradable financial instruments—stock, which acts as a currency, and bonds, which provide income and eventual capital return. In their model (MBH), they acquire target firms by offering a mix of the holding company’s stock and bonds, giving owners upside participation and cash‑flow from bonds while preserving capital for the holding. This “agglomeration” governance framework creates an umbrella that lets small‑cap firms (as low as $1‑10 million in revenue) enjoy public‑company benefits—access to capital markets, credibility, and growth opportunities—without the costly, complex IPO process. The conversation underscores that this structure fills a gap for SMEs that otherwise must either stay private or sell outright.

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There's a big arbitrage between the value of a private company and the value of a larger public company. Arbitrage effectively, when a new company comes to join you, increases the whole pie quite considerably. The big advantages with a public company, obviously, you have the credibility because it's completely transparent. People can look at the accounts, they can see all the companies that are involved in it. That transparency gives you a lot of credibility. It's easier to go out and win customers. Customers, it's easier to go and do M&A deals. So the first thing is the credibility it gives you when you go into discussions. The other one is you can issue financial instruments that are tradable. So you can issue your stock, which is a currency effectively. And as we do as well in this company MBH, we can also issue bonds. And bonds are like a debt instrument. Now, historically, when you've used bonds in mergers and acquisitions, what people tend to do is sell them to the market. Raise cash and then use the cash to do acquisitions. What we do is we will target a company where we will give the owners of that company some stock in the holding company and some bonds in the holding company. So effectively, from the bonds, they get some income. And after a period of time, they get the capital back. And on the stock, they obviously get the upside in the growth going forward. So they get to join part of the kind of growth curve. And then for the general investors, they get the benefit of these profitable, well-run companies coming to join this group and constantly adding more revenue, more profit to the whole pie. We think it fills an important space out there because there's not much opportunity for small to medium-sized companies. You can either sell or not sell. You can't really go public. This provides a framework or an umbrella that allows small to medium-sized companies to get the benefit of being a public company without going through the the shitty bit of the process effectively.
Yeah, no, I didn't even know you could at 1 to 10 million go public. So that's, I mean, that's huge right there. I didn't even know that's possible.
Yeah, it's a small cap. Yeah. So we, I mean, we call the structure agglomeration. Okay. Yeah. There's lots about it online.
Gotcha. Okay.
It's our governance structure.