Should a holding company go public, and at what size?

Who going public fits

Going public fits a narrow group of holding companies. A holding company should have four things before it lists:

1. Real earnings, or a clear and near path to them. The public market can value a platform above the businesses inside it, but only if there are earnings to value.
2. Books an auditor can work with. A public company needs annual financial statements audited by a firm registered with the PCAOB. Messy books make the audit slow, expensive and sometimes impossible.
3. An acquisition program that needs a currency other than cash. The main practical advantage of public stock is that sellers can sell it, so they will take it as payment. If you don't plan to buy companies with stock, much of the reason disappears.
4. People who will do the work of being public. Quarterly and annual reports, disclosure rules, a board, investor communication. A founder who wants none of that should stay private.

It does not fit a company that hopes a listing will solve its problems: one that can't raise money privately, has no earnings, or wants a stock price to replace a business plan. A listing amplifies what is already there.

At what size does it make sense?

There is no legal minimum size to be a public company. The market quotation standards are about the stock, not the business: for example, the OTCQB requires, among other things, a minimum bid price of $0.05, at least 50 holders with 100 or more shares each, a public float of at least 10%, PCAOB-audited annual financials and current SEC reporting, as of its Rules v6.1 dated September 17, 2026.

The practical question is whether the benefits outweigh the cost of being public. As a rule of thumb, look for:

• A holding company with at least one profitable business and a pipeline of acquisitions it can describe specifically.
• Enough earnings, now or within a plan an investor can believe, to carry the annual cost of audit, legal and reporting without consuming the cash the acquisitions need.
• Sellers in the target industry who would accept stock if they could sell it.

Smaller than people expect is possible. Our best outcome, not a typical one: a company went public with about $1.5 million in revenue at a $3.5 million starting valuation after raising about $100,000. Over seven years the founder made three acquisitions. One failed and was closed; one succeeded. He sold the original business, moved to Nasdaq, and sold the company for $240 million in cash. Most companies that size should not list, and most that do will not end that way. It shows the range, not the average.

See whether a holding company with $1 million to $5 million in revenue can go public.

What a public holding company can do that a private one can't

• Pay sellers in stock they can sell. Private stock is hard to value and hard to sell, so most sellers discount it heavily or refuse it. Public stock has a price every day and, after holding periods, a market. See why sellers accept public stock more readily.
• Raise capital without selling the company. A public company can issue shares to investors on an ongoing basis, rather than raising a new private round for every deal.
• Give early investors liquidity without a sale. Investors in a private holding company usually wait for a sale. In a public one, they can sell shares under the securities rules. See investor liquidity without selling.
• Attract and keep operators with stock options that mean something.

The evidence that this matters: an academic study of more than 6,000 IPO registrations from 1990 to 2024 found that completing an IPO raised a company's annual probability of making an acquisition by about 12 percentage points, and about three-quarters of the additional deals were paid at least partly in stock. See does being public help a company make acquisitions.

The risks, stated plainly

• Stock-paid deals can be worse deals. The same study found that, among newly public firms, stock-paid acquisitions underperformed cash deals by 20 to 30 percentage points over three to five years and were about 50% more likely to end in delisting. Easy currency invites overpaying.
• Dilution. Every share issued to a seller or investor reduces everyone else's ownership. One small public roll-up paid more than 80% of a roughly $6.6 million acquisition in restricted stock, and its share count went from about 53 million to about 94.6 million in two years. See how to avoid dilution in a public roll-up.
• Cost. Audits, legal, transfer agent, filings and investor relations are permanent costs. See what it costs to go public and stay public.
• A low or illiquid stock price. If the stock trades thinly or below what the business is worth, it is a poor currency and a source of frustration for everyone holding it.
• Failure in public. A UK holding company that combined about 19 small businesses on a stock market delisted in January 2024 and entered administration a month later. Listing a group of businesses does not make them a company.

The routes, in brief

A holding company can go public by direct listing (registering shares with the SEC and getting quoted without raising money in an underwritten offering), by reverse merger into an existing public company, or by IPO. Of the 17 companies I have taken public, 11 were direct listings, 4 reverse mergers and 2 IPOs. On our sites we estimate roughly 6 months for a reverse merger or IPO and about 10 months for a direct listing. The detail lives on PublicFinancial: how long it takes, what a direct listing costs, what a reverse merger costs, and the ongoing costs. See also the ways a holding company can go public.

How to decide

1. Write the acquisition plan for the next five years: how many businesses, at what size and price, paid how.
2. Ask whether the plan can be financed privately (SBA, seller notes, private equity) without giving up control. If yes, stay private for now.
3. If the plan needs a currency other than cash, or capital you can't raise privately on acceptable terms, model the public route: the cost of being public, the dilution from stock paid to sellers, and what happens if the stock trades poorly.
4. Fix the books first. An audit-ready company has options; one that isn't has none.
5. Decide on timing. Listing too early, before there are earnings, usually means a low valuation and heavy dilution. Listing too late leaves acquisitions undone.

The Holding Company Playbook gives a direct answer on this question for your situation, with the reasons, as one of its sections. See the Playbook.

Where these numbers come from: OTCQB standards from the OTCQB Rules v6.1 (September 17, 2026); the IPO and acquisition study summarized on the CLS Blue Sky Blog (July 14, 2026); the dilution example from a case study of Castellum; the UK holding company failure from TheBusinessDesk. The $240 million example and the route counts are from Meraki Partners' own work: Joel Arberman has taken 17 companies public over 30 years in capital markets.

Related questions

Can a holding company go public without raising money?

Yes. A direct listing registers existing shares and gets them quoted without an underwritten offering. Many small companies raise a private round before or alongside the listing so they have the shareholders and the cash the process needs.

Do I need audited financial statements to go public?

Yes. An SEC-reporting company needs annual financial statements audited by a PCAOB-registered firm. The number of years required depends on the route and the company's size; confirm with securities counsel and your auditor.

Should I list on the OTC markets or Nasdaq?

Most small holding companies start on the OTC markets because the standards are lower, and move to Nasdaq or NYSE American when they meet those exchanges' requirements. See what it takes to uplist from OTC to Nasdaq.

What happens to my SBA loans if the holding company goes public?

A listing can change who owns the borrower and who guarantees the loan, so the lender has to be involved early. See SBA loans when the parent goes public.

What comes next

If the answer for you is "not yet," the next question is what kind of help gets you there: an adviser, a course, or a peer group. See what an acquisition adviser costs compared with a course or mastermind.

Related articles

• How do you build a holding company for acquisitions?
• Public roll-up vs private roll-up: how does the math compare?
• How do you pay a seller with stock instead of cash?
• Which small holding companies have gone public, and what happened?
• What finance team does a public holding company need?

• Who can advise on taking an acquisition holding company public?
• From one acquisition to a listed serial acquirer: what are the milestones?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.