Executive Summary

• Micro/small-cap companies can access institutional capital by listing on senior exchanges (NASDAQ/NYSE/Cboe) rather than OTC.
• Preparation window is typically 6–18+ months: governance, audits, board building, SEC drafting, banker selection.
• Typical upfront costs to go public: ~$500k–$1M; ongoing public-company costs may run $1M–$2M/yr depending on complexity.
• Lockups for early investors often land around ~6 months (sometimes 3–12 months), so plan documentation early.
• Bring supportive capital to the IPO; don’t rely solely on underwriters. Maintain strong, ongoing investor relations.
• Benefits post-listing: liquidity, talent attraction via equity, stock-as-currency for partnerships and M&A, and brand credibility.

Full Transcript

Jason Kirby: Hi, everyone. Welcome back to Fundraising Demystified. Today we have Peter Goldstein with us, founder and managing director of MS Capital and CEO and founder of Exchange Listing. Welcome to the show, Peter.

Peter: Jason, great to be here. Thanks for having me. I’m excited to have a dynamic dialogue and share some great insights along the way.

Jason Kirby: I’m excited to have you on. This is a little different than our typical guest. We’re diving into how companies can go public and what you’re doing to enable that. You’re a capital allocator, an author, and you help companies go public—pretty unique. Give our audience a bit about you and your story?

Peter: I’ll give you the short version. I really believe I have entrepreneurial DNA. I’m 60 now. I started my first company at 24 and had my first exit at 30. For the last 35 years I’ve focused on building companies—it’s where my passion lies.

Peter: Over the last 20 years my niche has been the capital markets, working with small and micro-cap companies that either want to be public for the first time through an IPO or are existing public companies that are undervalued and haven’t realized all the benefits of being public. One opportunity led to the next: I’ve been a founder, taken two of my own companies public, been an investment banker, started an investment bank from scratch, became fully licensed, sold it, and then created Exchange Listing and MS to serve this niche that’s greatly underserved and often misunderstood regarding what’s possible for emerging growth companies to access public capital and liquidity.

Jason Kirby: Let’s start with your role in taking companies public—one of your companies, even. What was that experience like, building a company that was ready to go public?

Peter: Before taking my own companies public, I advised several micro-cap companies on traditional scaling—operations and systems. One of them, while we were doing some M&A work, asked me to help with going public. I knew nothing about the process; they trusted me to learn it and guide them. I cut my teeth about 25 years ago on a reverse merger between a private and a public company—historically a way for micro and small caps in Canada and the U.S. to become public.

Peter: I realized there are great opportunities for small and micro-cap companies to access capital and liquidity that traditional investment bankers weren’t fully serving—it’s hard to find bankers who recognize companies of this size. I also learned that growing from private into a public company takes time, planning, and resources. My first company listed on the OTC markets; my second went to NASDAQ. As a founder, I made all kinds of mistakes and learned all kinds of lessons I now bring to the entrepreneurs I work with.

Jason Kirby: Give our audience the difference between listing on the OTC versus listing on NASDAQ.

Peter: We focus now on NASDAQ, NYSE American, and the Cboe—senior exchanges. There was a time when OTC markets were more vibrant for earlier-stage companies to develop as public companies and access capital and liquidity. Much of that has dried up. Senior exchanges are where the benefits are: access to institutional capital, better liquidity, stronger compliance, transparency, and reporting. We work with companies ready to meet those more rigorous listing criteria or with OTC companies that are ready to “graduate.” If someone is starting the public journey now, I recommend a senior exchange listing.

Jason Kirby: What are some of those benefits of going to a senior exchange?

Peter: The obvious ones are access to capital and liquidity. Importantly, micro and small caps don’t need to be unicorns to access institutional capital—there are investors focused on emerging growth companies. It’s an alternative to VC and PE. Yes, capital is expensive these days, but it exists for companies with liquidity events. Also, the structures, transparency, and controls required for listing benefit the whole organization and its stakeholders.

Jason Kirby: What stages should a company be at before considering this process?

Peter: Small cap typically starts around a $300M market cap up to ~$1B. Micro cap is ~\$50M–$300M. We focus on micro caps. Market cap is price per share times shares outstanding. Nano caps exist but are usually better suited to OTC or other junior platforms.

Jason Kirby: Coming from private markets, founders think “we raised $10M for 20%, so we’re valued at $50M.” That’s not necessarily equivalent here, right? What underwriting and revenue levels fit?

Peter: It starts similarly but changes because your market cap becomes marked to market and volatile, especially in this environment. Valuation is set in collaboration with the investment bank and ultimately by investors in the IPO via demand—like an auction. Companies can test the waters now. Down rounds are common. The key is defensible comps and being realistic about market conditions.

Jason Kirby: Many companies have down rounds or complex liquidation preferences and preferred shares. Can going public help clean up the cap table?

Peter: Often, yes—depending on structure. Conversions of preferred shares and/or debt can occur at a liquidity event, improving the balance sheet and bringing fresh capital. VC and PE pockets may no longer be available; public markets can provide optionality. There’s more access at the small/micro-cap level than people realize—myths from the dot-com era linger, but many aren’t true.

Jason Kirby: Tell us about your firms—MS Capital and Exchange Listing—and how you help companies navigate this.

Peter: Exchange Listing is our advisory arm and the heart of our business. In this market, you want 12–24 months to prepare and educate. Large and mid-caps can hire big consultancies; small/micro caps have fewer options. I created Exchange Listing to serve emerging growth companies whose management is committed to going public and needs a single partner to advise across the ecosystem.

Peter: We run a 6–18 month wireframe to prepare companies: systems, reporting, drafting SEC requirements, building the board—operating as if public before executing. We liaise with exchanges (NASDAQ, NYSE American, Cboe) to understand listing requirements (quantitative and qualitative). We work within the banking community to match companies with the right banker, and similarly with auditors and legal—flattening learning curves, costs, and timelines.

Jason Kirby: You’ve done this many times. Any horror stories or success stories that shaped your approach?

Peter: The bell ringing is a phenomenal moment where hard work culminates. Recently, I participated in the first issuer IPO at the Cboe (historically futures/ETFs) with an AI company—rewarding after two volatile years. On mistakes: early on, I didn’t understand how to interact with counsel and the SEC. We spent 13 months dialoguing over issues that should have taken six, driving hidden costs and delays. Now we co-write the S-1 perspective with counsel and move efficiently through SEC comments without needless battles.

Peter: Biggest mistake for entrepreneurs: underestimating the hard work—not just getting public, but operating as a public company. You’re suddenly running a second business line (the public side) alongside your operations.

Jason Kirby: What’s a plan-derailing shock you’ve seen?

Peter: Over-optimistic financial assumptions. Great teams—even VC-backed—can miss projections. When assumptions driving valuation and ROI don’t hold, investors lose faith. I now rigorously test early-stage assumptions in models.

Jason Kirby: Let’s talk positives beyond capital. What upside have your clients seen post-listing?

Peter: Using stock to attract and retain talent via option plans; using equity as currency for strategic partnerships and M&A. A major undervalued benefit is brand credibility—bell-ringing exposure, governance, and meeting listing criteria help overcome hurdles in future business opportunities. We also work with foreign issuers seeking U.S. visibility.

Jason Kirby: Companies are staying private longer despite liquidity needs. Why?

Peter: It’s a mix of issues, largely economic. Many IPOs open near or below issue price, penalizing shareholders and creating downward pressure. Costs of going public, pressure on performance, and lack of quality capital across VC/PE/institutional all contribute. There’s a lot of sidelined money. Fast money dynamics and priorities of last-in capital can be challenging. Still, there’s a pipeline waiting—my message: get ready now. It takes 6–12 months to be ready. When the window opens, you want to take the shot. Even if you never go public, the preparation benefits the company—that’s why I wrote my book.

Jason Kirby: What happens to early investors (angels/seed) after IPO compared to fast-money last-in investors?

Peter: Last-in capital often calls the shots. Legacy holders usually face lockups—often ~6 months, sometimes 3–12 depending on underwriter and cap table diversity. Investors track those windows because more sellers can pressure price as lockups expire. Early investors should prep documentation early, follow company performance, and avoid rushing to sell solely because of liquidity—if the thesis holds, consider staying the course.

Jason Kirby: What types of companies are a good fit for Exchange Listing and for a micro/small-cap IPO path?

Peter: It starts with the jockey—we bet on management. Early-stage companies will share similar growth stories and face variables. We want strong teams plus controls and structures to support growth. Sector-wise: AI/tech, consumer product, and we’re big on life science/medtech. I’m keen on companies doing good while being solidly capitalist. With MS, we provide catalyst capital—often special-situation or last-mile—to unlock the next event and trajectory to a senior exchange.

Jason Kirby: Revenue thresholds—what do you look for? $5M, $50M, $100M? Does revenue matter?

Peter: We’ve worked with companies at $5M, $50M, $100M in revenue—and pre-revenue (often life sciences). We focus on market capitalization and traction, then reverse-engineer the requirements to meet exchange criteria. If we buy into the team and they’re committed, we partner and often take equity to align—this isn’t transactional for us.

Jason Kirby: Costs to play the game? Say a consumer brand doing ~$20M revenue—what budget should they expect?

Peter: Ranges vary by complexity—audits, legal structure, subsidiaries, etc.—but think roughly $500k–$1M to prepare and execute frugally. Ongoing public-company carrying costs can be $1M–$2M/yr. MS Capital often provides last-mile capital to cover going-public costs so operating capital can stay focused on growth. Also line up D&O, reporting, and legal budgets.

Jason Kirby: So companies should bring capital and investors to the table—don’t expect the banker to do it all?

Peter: Exactly—mistake 101 is assuming underwriters bring all the capital. Especially now, the more support an issuer brings, the stronger the IPO. Some bankers mandate it. Demand can change; existing and new supportive capital is critical.

Jason Kirby: I’m glad you said that—many think IPO = new capital source only. Any final pro tips on investor relations?

Peter: Maintain close relationships with existing shareholders; constantly build potential new ones. Communicate regularly—wins and losses. Get to know new investors during the roadshow. Manage your shareholder list with the goal of building a broad, dynamic base as a public CEO.

Jason Kirby: Where can people learn more about you, your book, and your firms?

Peter: LinkedIn is best—I’m active there and share value regularly. You’ll find info on Exchange Listing and MS Capital. We’re about to invite new accredited investors to MS Capital; our founders’ round delivered strong returns. If you want to talk, send me a direct message.

Jason Kirby: Any final words before we wrap?

Peter: I think we’re aligned on bringing knowledge and insight to entrepreneurs seeking capital and growth. It’s been great chatting—I hope it brought value to listeners, and I look forward to ongoing conversation.

Jason Kirby: Awesome. Thanks, Peter.

FAQ: Micro & Small-Cap IPOs

Episode Details

• Page URL: https://blog.thunder.vc/peter-goldstein
• Publish Date: May 23, 2024
• Video URL (no embed): https://youtu.be/1gXEZNwqhco

Key Topics & Keywords

micro-cap IPO, small-cap IPO, senior exchange listing, NASDAQ listing requirements, NYSE American, Cboe IPO, OTC vs senior exchange, IPO readiness, SEC S-1 process, lockup period, last-mile capital, Exchange Listing, MS Capital, investor relations, market capitalization, life sciences IPO, medtech IPO, reverse merger, governance, audits, board building