Taking the family enterprise public is a huge decision for any family to make. Certainly, an IPO can bring significant benefits by providing external capital to fuel the enterprise’s growth, boosting its visibility in the marketplace, improving its governance processes, and enabling succession planning. At the same time, however, family members may have concerns around loss of control, the influence of external stakeholders on company strategy, and the potential for a public listing to negatively impact the culture and values of the business.
While an IPO is not necessarily the right strategic option for every family-owned enterprise, many that have listed have prospered far more than they might otherwise have done. More than half of the world’s 500 largest family enterprises are public, according to the EY and University of St Gallen Global Family Business Index. What’s more, the index shows that the combined revenue of publicly listed family enterprises increases much faster than that of privately-owned companies, suggesting that public ownership really can pay off.
Clearly, there is a lot for a family to consider when it does decide to embark on an IPO – not least the expectations of different family members.
Explore how to make a success of taking the family enterprise public.
