If your company is approaching a growth ceiling and how it might finance future potential calls into question the use of OPM (other people’s money), there will probably be large lifestyle changes as a consequence. Succinctly stated, investors want accountability that you are not used to.
Recently there have been a few very notable crises when executive management, used to having its way, failed to modify their prerogatives upon going public/doing leveraged deals that provide adequate development but without “public” funds.
These failure to adjust to crises have been extremely expensive. In one case there was a backdating of options to accommodate the boss’s wishes/needs/desires that, when caught, resulted in restatement of financial reports; stopped trading in company shares; and violation of credit protocols such that the lenders were able to increase interest rates. The cost to the company was enormous. There was also the matter of some interest on the part of the SEC.
The boss, in a fit of temperament, is now trying to take the company private again so that he doesn’t have to comply with any but his own mandates. Little does he appreciate that the financing arrangements to accomplish that will also be a yoke on his neck.
An excellent way to avoid this adjustment crisis potential is to make the “lifestyle” and reporting responsibility changes before any decision to use OPM is implemented. A year of living under these new “rules” may have a serious crisis avoidance impact on your company.