Most of what gets written about going public is written for companies that will never read it. The billion-dollar AI listing, the household-name tech IPO, the deal with three investment banks and a hundred-person deal team, these dominate the headlines and the guidance that follows them. A mid-sized business considering a Nasdaq or NYSE American listing, with revenue somewhere between $20 million and $300 million, a lean finance team, and a genuine but achievable ambition to go public, is left to work out what actually applies to a company its size.

This article is written for that business. It covers what a mid-sized company actually needs to do to prepare for a US public listing: how to choose between Nasdaq and NYSE American and their respective tiers, what the quantitative listing standards actually require, what the JOBS Act and emerging growth company status mean for a company at this scale, what the financial statement and audit requirements involve, what governance and internal controls need to be built, and how the answer changes depending on your specific situation, whether you are an international company, a business that still needs to raise capital, a candidate for a SPAC transaction, or a company with a more complex group structure.

It also covers the current state of the listing market, because that context matters. The rules governing smaller company listings have tightened meaningfully in the past two years, and understanding why matters as much as understanding the rules themselves.

1. Why a mid-sized business considers going public

The decision to pursue a public listing is not primarily a financial engineering decision. For most mid-sized businesses, it is driven by one or more of a small number of underlying needs: access to growth capital that private markets cannot provide at the right cost or speed, liquidity for founders and early investors who have been in the business for years without an exit path, an acquisition currency in the form of publicly traded stock that can be used to buy other businesses, enhanced credibility with customers, partners, and lenders that comes with public company status, or an eventual path to being acquired by a larger public company that finds a listed target easier to evaluate and integrate.

None of these reasons make the decision automatic. A public listing brings recurring costs, in the form of audit fees, listing fees, legal fees, investor relations, and the internal cost of the compliance function, that a private company does not carry. It brings permanent scrutiny of financial performance on a quarterly cycle, market pressure that can distort long-term decision-making if managed poorly, and personal liability exposure for the CEO and CFO through the certifications they must sign on every periodic filing.

The businesses that benefit most from going public are the ones where the capital access, liquidity, or currency value clearly outweighs those costs, and where the finance function is capable of being built to the standard the public markets require within a realistic timeframe. Understanding what that standard actually is, in concrete terms, is the purpose of the rest of this article.

2. The realistic timeline

Mid-sized companies consistently underestimate how long proper preparation takes, largely because the headline IPO stories they read about compress a much longer internal preparation process into the few months of public deal activity that make the news. For a company starting from a private-company baseline, a realistic preparation timeline runs 18 to 24 months from the decision to pursue a listing to the actual pricing and trading debut, and companies that compress this meaningfully below 12 months are almost always paying for it in deal risk, SEC comment letter delays, or a weaker offering.

In the first six to nine months, the priority work is foundational and largely invisible to outside parties: engaging a PCAOB-registered audit firm and beginning the audit of the historical periods, building technical accounting documentation for revenue recognition, leases, and equity compensation, redesigning the close process to a public company timetable, and beginning board and audit committee recruitment. This is also the point at which the company should engage banking relationships informally, well before a formal underwriter selection process, to begin building the market narrative and gauge investor appetite.

In the following six to nine months, the work shifts toward formal deal preparation: drafting the S-1 registration statement, completing the historical audit, finalising the underwriting syndicate, and, for an EGC, submitting the draft registration statement confidentially to the SEC for initial staff review. This period typically includes at least one, often two or three, rounds of SEC comment letters that must be addressed before the registration statement can be made public.

The final phase, typically two to four months, covers the public filing of the registration statement, the roadshow, pricing, and the actual listing. This is the phase most visible from the outside and the one most commonly mistaken for the entirety of the IPO process. In reality, it is the final stage of a process that began well over a year earlier.

Companies that treat the decision to go public as something that can be announced internally and executed within six months are working against the grain of how the process actually unfolds. The companies that move fastest through the visible, public phase of the IPO are consistently the ones that did the most work in the quiet, invisible phase beforehand.

3. Choosing your exchange: Nasdaq versus NYSE American

For most mid-sized companies, the practical choice of US listing venue comes down to the Nasdaq Stock Market or NYSE American, since these venues offer the most accessible quantitative standards for a company at this scale. That said, the NYSE main board should not be ruled out automatically. The NYSE offers its own earnings test, requiring aggregate adjusted pre-tax income of at least $10 million over the prior three fiscal years with minimums in each of the two most recent years, and, separately, a global market capitalization test of $200 million, together with distribution requirements that generally call for at least 400 round lot holders, 1.1 million publicly held shares, a $40 million market value of publicly held shares, and a $4.00 share price. A mid-sized company with a stronger earnings profile or a higher anticipated offering valuation should have its bankers model the NYSE main board test alongside Nasdaq and NYSE American before ruling it out.

Nasdaq and NYSE American serve a similar function for smaller and mid-sized issuers, but they are not identical, and the differences matter when choosing between them.

Nasdaq’s three tiers

Nasdaq operates three listing tiers: the Nasdaq Global Select Market, the Nasdaq Global Market, and the Nasdaq Capital Market. Corporate governance requirements are the same across all three tiers. What differs is the financial and liquidity standard required for initial listing, with the Global Select Market being the most demanding and the Capital Market being the most accessible.

For most mid-sized businesses considering an IPO, the realistic Nasdaq tiers are the Global Market and the Capital Market. The Global Select Market, the most demanding tier, offers four alternative standards, all out of reach for most companies at first listing. Under the earnings standard, aggregate pre-tax earnings must exceed $11 million over the prior three fiscal years, with positive earnings in each of those years and at least $2.2 million in each of the two most recent years. Under the cash flow standard, aggregate cash flows must exceed $27.5 million over three years with positive cash flow in each year, alongside an average market capitalization of at least $550 million and prior-year revenue of at least $110 million. Under a separate market capitalization standard, average market capitalization must be at least $850 million with prior-year revenue of at least $90 million. Under the assets and equity standard, the company needs total assets of at least $80 million, stockholders’ equity of at least $55 million, and a market capitalization of at least $160 million.

The Nasdaq Global Market requires a company to meet one of four standards, each of which also carries a $4 minimum bid price, 1.1 million unrestricted publicly held shares, and at least 400 round lot shareholders. Under the income standard, the company needs income from continuing operations before income taxes of at least $1 million in the latest fiscal year or in two of the last three fiscal years, stockholders’ equity of at least $15 million, a market value of unrestricted publicly held shares of at least $15 million, and three registered market makers. Under the equity standard, the company needs stockholders’ equity of at least $30 million, two years of operating history, a market value of unrestricted publicly held shares of at least $18 million, and three market makers. Under the market value standard, the company needs a market value of listed securities of at least $75 million, a market value of unrestricted publicly held shares of at least $20 million, and four market makers. Under the total assets and total revenue standard, the company needs total assets and total revenue of at least $75 million each, the same $20 million publicly held shares requirement, and four market makers.

The Nasdaq Capital Market, the most accessible of the three tiers, requires a company to meet one of three standards, each also carrying a $15 million market value of unrestricted publicly held shares requirement, one million publicly held shares, 300 round lot shareholders, and three market makers. Under the equity standard, the company needs stockholders’ equity of at least $5 million and two years of operating history. Under the market value standard, the company needs stockholders’ equity of at least $4 million and a market value of listed securities of at least $50 million, without the operating history requirement. Under the net income standard, the company needs stockholders’ equity of at least $4 million and net income from continuing operations of at least $750,000 in the latest fiscal year or in two of the last three fiscal years.

• On the Nasdaq Capital Market's equity standard, a company needs stockholders' equity of at least $5 million, a market value of publicly held shares of at least $15 million, a minimum bid price of $4 (or a $2 to $3 closing price under the alternative route), at least 300 round lot shareholders, and two years of operating history.

• On the Nasdaq Global Market's income standard, a company needs stockholders' equity of at least $15 million, a market value of publicly held shares of at least $15 million, a minimum bid price of $4, and at least 400 round lot shareholders. There is no operating history requirement under this standard.

• On the Nasdaq Global Select Market's Standard 4, a company needs stockholders' equity of at least $55 million, a market value of publicly held shares of at least $45 million, a minimum bid price of $4, and at least 450 round lot shareholders. There is no operating history requirement under this standard either.

The standard Nasdaq initial listing price requirement is $4 per share across all three tiers. The Capital Market provides limited alternative routes using a $3 or $2 closing price instead, available only to companies that separately satisfy additional financial conditions such as a minimum revenue or net tangible assets history, so the $4 figure should be treated as the default rather than an absolute rule for every company. Companies listing in connection with an IPO must also meet the market value of publicly held shares requirement solely from the offering proceeds, meaning pre-existing private placement shares generally cannot be counted toward it.

NYSE American’s standards

NYSE American operates a single tier with five alternative financial standards, of which a company must meet one, each requiring a $4.00 minimum share price. Standard 1 requires pre-tax income from continuing operations of at least $750,000 in the most recent fiscal year, or in any two of the last three fiscal years, together with stockholders’ equity of at least $4 million and a market value of unrestricted publicly held shares of at least $15 million.

Standard 2 is built around operating history rather than income or market capitalization: it requires at least two years of operating history, stockholders’ equity of at least $5 million, and the same $15 million publicly held shares requirement, with no separate market capitalization or income test. Standard 3 requires a global market capitalization of at least $50 million, stockholders’ equity of at least $4 million, and the same $15 million publicly held shares requirement. Standard 4a requires a global market capitalization of at least $75 million, with no separate stockholders’ equity test, and a higher publicly held shares requirement of $20 million. Standard 4b requires total assets and total revenue of at least $75 million each, in the most recent fiscal year or in any two of the last three, also with no separate equity test and the same $20 million publicly held shares requirement.

Alongside the financial standards, NYSE American requires companies to meet a distribution standard from one of three options, generally requiring either 800 public shareholders in North America and a 500,000 share public float, or 400 shareholders and a one million share float, or 400 shareholders, a 500,000 share float, and a minimum average daily trading volume of 2,000 shares over the preceding six months. For companies listing in connection with an underwritten offering, the offering itself must include at least $15 million in unrestricted publicly held shares.

• Under Standard 1, the principal test is pre-tax income of at least $750,000, alongside stockholders' equity of at least $4 million, a market value of publicly held shares of at least $15 million, and a minimum price of $4.00.

• Under Standard 2, the principal test is two years of operating history, alongside stockholders' equity of at least $5 million, the same $15 million market value of publicly held shares, and the same $4.00 minimum price.

• Under Standard 3, the principal test is a global market capitalization of at least $50 million, alongside stockholders' equity of at least $4 million, the same $15 million market value of publicly held shares, and the same $4.00 minimum price.

• Under Standard 4a, the principal test is a global market capitalization of at least $75 million. There is no separate stockholders' equity requirement under this standard. It carries a higher market value of publicly held shares requirement, at least $20 million, and the same $4.00 minimum price.

NYSE American has tightened its standards substantially through 2025 and 2026, raising the minimum share price for all initial listings to $4.00, up from the previous $2.00 and $3.00 thresholds, and increasing the Standard 2 stockholders’ equity requirement from $4 million to $5 million. These changes have moved NYSE American’s standards materially closer to Nasdaq’s, narrowing what was previously a meaningful gap between the two exchanges for smaller issuers.

How to choose

For most mid-sized companies today, the practical choice comes down less to which exchange has lower thresholds, since the gap has narrowed, and more to sector fit, index inclusion prospects, investor base, and the trading and analyst coverage each exchange tends to attract for a company of your profile. Nasdaq has historically been the dominant venue for technology, life sciences, and growth-oriented businesses and has led US exchanges in both the number of operating company IPOs and total proceeds raised for six consecutive years through 2024. NYSE American has traditionally served a broader range of smaller industrial, consumer, and diversified businesses, though the standards convergence with Nasdaq means this distinction is less pronounced than it once was.

The right approach is to map your company’s current and projected financial profile against both sets of standards, identify which tier and exchange combination you can realistically meet at the time of listing, and then evaluate the qualitative factors, underwriter relationships, sector peers, and index eligibility, that will affect trading liquidity and investor attention after you list.

4. Emerging growth company status and what it means for a mid-sized issuer

Most mid-sized companies pursuing a first-time US public listing will qualify as an emerging growth company under the JOBS Act, and understanding what this status provides is central to planning the IPO preparation timeline correctly.

A company qualifies as an EGC if it has total annual gross revenues under $1.235 billion in its most recently completed fiscal year and had not sold common equity under a registration statement before December 8, 2011. EGC status is lost on the earliest of four triggers: the last day of the fiscal year in which annual gross revenues reach $1.235 billion, the last day of the fiscal year following the fifth anniversary of the company’s IPO, the date the company has issued more than $1 billion in non-convertible debt over the preceding three years, or the date the company is deemed a large accelerated filer. Large accelerated filer status generally requires public float of at least $700 million as of the last business day of the company’s second fiscal quarter, at least 12 months of Exchange Act reporting, at least one annual report already filed, and no eligibility under the smaller reporting company revenue test.

For a mid-sized company with revenue well under the $1.235 billion threshold, EGC status will typically apply for the full five years following the IPO unless the company grows very rapidly. This status unlocks several accommodations that materially reduce the preparation burden and the ongoing compliance cost in the early years as a public company.

An EGC can submit two years of audited financial statements in its IPO registration statement rather than three, which is one of the most significant practical benefits for a company preparing its historical financials. An EGC is exempt from the SOX Section 404(b) auditor attestation requirement on internal controls for as long as EGC status lasts. This exemption is not automatically replaced by an attestation requirement the moment EGC status ends; once EGC status is lost, whether 404(b) applies depends on the company’s filer classification at that point, and a company with public float under the large accelerated or accelerated filer thresholds, or one that still qualifies as a smaller reporting company on the revenue test, may remain exempt regardless. An EGC also benefits from reduced executive compensation disclosure requirements, is permitted to submit its draft registration statement confidentially to the SEC for review before public filing, and can elect an extended transition period for complying with new or revised accounting standards, aligning its adoption timeline with private company effective dates rather than public company dates.

The confidential draft submission process deserves particular attention for a mid-sized company. It allows the company to work through initial SEC staff comments on its registration statement privately, without the immediate public exposure that comes with a public filing, and to abandon the process before it becomes public if the company decides not to proceed. This nonpublic review is not limited to EGCs; the SEC extended it to companies generally some years ago. It is important to understand the limits of the confidentiality, though: if the company does proceed, the registration statement and all draft submissions must be publicly filed with the SEC, generally at least 15 days before the start of the roadshow, and the SEC’s comments and the company’s responses ordinarily become public after the registration statement is declared effective. The advantage is a private first pass at SEC review, not permanent confidentiality for a deal that goes forward.

The five-year sunset is a planning horizon, not a formality

Companies that went public in 2020 lost their EGC status at the end of 2025, calendar year-end regardless of their revenue or size at that point. A mid-sized company planning its IPO should build the eventual loss of EGC status into its multi-year compliance roadmap from day one, including the point at which 404(b) auditor attestation, full executive compensation disclosure, and standard accounting standard adoption timelines will apply.

5. The financial statement and audit foundation

Whichever exchange and tier a mid-sized company targets, the financial statement and audit requirements form the foundation of the preparation process, and they take longer to build than most founders and CEOs expect.

Historical financial statements

For a US domestic issuer, the IPO registration statement is filed on Form S-1 and must include audited financial statements prepared under US GAAP. A qualifying foreign private issuer generally files on Form F-1 instead, and may present its financial statements under IFRS as issued by the IASB without reconciling to US GAAP. Which form and framework applies is a threshold question that should be resolved early, since it affects the historical financial statement preparation path described in the rest of this section. As an EGC, a mid-sized company can generally satisfy the historical financial statement requirement with two fiscal years of audited financial statements rather than three, plus any required interim period. Those financial statements must be audited by a PCAOB-registered accounting firm, applying PCAOB auditing standards, which are more prescriptive in several areas than the standards typically applied in private company audits.

For a company that has been audited previously under private company or AICPA standards, the transition to a PCAOB audit is not a formality. It typically requires additional audit procedures around internal controls, revenue recognition testing, and disclosure completeness that a private company audit would not have covered. Companies should engage a PCAOB-registered audit firm with public company and IPO experience well before the intended filing date, ideally 18 to 24 months ahead, so that the historical periods required for the S-1 can be properly audited without compressing the timeline.

Choosing the audit firm

The choice of audit firm for a mid-sized company’s IPO is a genuine strategic decision, not simply a continuation of the existing relationship. Underwriters and institutional investors have expectations about audit firm credibility that vary by sector and deal size, and a firm with limited SEC engagement experience can create friction during the SEC review process and during the underwriters’ due diligence.

For a mid-sized issuer, this does not necessarily mean a Big Four firm is required or even the best fit. Several national and regional accounting firms have deep public company audit practices and IPO experience at exactly this scale, often with more attentive service and more competitive fees than a Big Four engagement would provide. What matters is confirming PCAOB registration, verifying the firm’s recent IPO and SEC reporting experience, and understanding their capacity to meet the compressed timelines that the IPO and subsequent quarterly reporting cycle will require.

The comfort letter and underwriter due diligence

Investment banks underwriting the offering will require the audit firm to deliver comfort letters at signing and at closing of the offering, covering financial data included in the prospectus, along with a bring-down of the audit opinion and negative assurance on the interim financial information. This process requires the audit firm to have completed sufficient work on the historical and interim periods to be in a position to provide that assurance on short notice as the deal timeline moves toward pricing.

Alongside the comfort letter process, the underwriters will conduct their own financial and legal due diligence, which typically includes management presentations, a detailed review of the historical financial statements, discussions with the audit firm, and scrutiny of any significant accounting judgments, related party transactions, or historical irregularities. A mid-sized company with clean, well-documented historical accounting moves through this process considerably faster than one that is reconstructing support for prior period judgments during the deal timeline itself.

Building the disclosure package

Beyond the audited financial statements themselves, the S-1 requires a comprehensive disclosure package: the business description, risk factors specific to the company and its industry, the MD&A covering the historical periods, executive compensation disclosure, related party transaction disclosure, a description of the capital structure and the offering itself, and the use of proceeds. For a mid-sized company preparing this for the first time, the risk factor section alone typically requires substantial work, since it must be specific to the company’s actual business and cannot rely on generic industry boilerplate that experienced SEC reviewers will flag.

Disclosure controls and the drafting committee

Alongside the audited financial statements, a mid-sized company preparing its first S-1 should normally establish a disclosure committee as part of its broader disclosure controls process. SEC rules require the company to maintain effective disclosure controls and procedures, but they do not mandate a specific committee structure; the disclosure committee itself is a widely used practice that the SEC has recommended rather than a legal requirement. In practice, a committee typically including the CEO, CFO, general counsel, and relevant business leaders, responsible for reviewing the registration statement and, after listing, every periodic report for accuracy, completeness, and consistency across sections, is the most common way companies satisfy the underlying disclosure controls requirement. SEC reviewers and underwriters’ counsel both look for evidence that the company has a genuine process for ensuring the business description, risk factors, MD&A, and financial statements tell a consistent story.

For a founder-led mid-sized business that has never operated with this level of formal review, establishing the disclosure committee and running it through at least one full drafting cycle before the live S-1 process begins is a worthwhile investment. It surfaces inconsistencies and gaps in the company’s data and narrative earlier, when they are cheaper and less disruptive to fix, than discovering them during the live SEC review process.

The MD&A and the growth narrative

For a mid-sized company, the MD&A section of the S-1 carries particular weight because it is where the company makes its case for growth to investors who have never previously reviewed its financials. Larger, more established companies can rely partly on brand recognition and analyst familiarity. A mid-sized, first-time issuer is relying almost entirely on the strength and credibility of its own disclosure to make the investment case.

This means the MD&A needs to do more than describe historical results. It needs to explain the business model with enough specificity that a generalist investor unfamiliar with the sector can understand what drives revenue and margin, address the company’s key operating metrics in a way that is consistent with how management actually runs the business internally, and discuss known trends and uncertainties candidly enough to be credible without undermining the growth narrative the roadshow will present. Getting this balance right typically takes several drafting rounds and benefits significantly from input by advisers who have seen how SEC staff and institutional investors react to overly promotional or overly vague MD&A drafting.

6. Building the accounting infrastructure before you file

The gap between private company accounting and the standard required to support an S-1 and subsequent public reporting is the single most underestimated element of IPO preparation for mid-sized businesses. This is not primarily about the historical financial statements being wrong. It is about the documentation, precision, and process discipline that public company reporting requires but that a private company’s finance function has typically never needed to build.

Technical accounting documentation

Every significant accounting judgment reflected in the historical financial statements needs to be supported by documented technical accounting analysis: how revenue is recognized under ASC 606 for each material revenue stream, how leases are classified and measured under ASC 842, how equity awards are valued under ASC 718, how any acquisitions have been accounted for under ASC 805, and how any foreign operations are translated under ASC 830. Private companies frequently apply these standards correctly in substance but without the level of written analysis that a PCAOB audit and subsequent SEC review expects to see.

Building this documentation retrospectively, covering periods that are already closed, is slower and more expensive than building it as part of the ongoing close process. A mid-sized company beginning IPO preparation should treat technical accounting documentation as a priority workstream starting as early as possible in the process, not as something addressed once the audit firm identifies a gap.

The close process and internal controls

A mid-sized company’s existing close process, built for private company reporting needs, is very unlikely to meet the deadlines that public company quarterly reporting requires without redesign. Building a close timetable that can reliably produce audit-ready financial statements within the 40 to 45 day window required for a 10-Q, with time remaining for the auditor’s review, requires defined ownership, documented procedures, and a level of discipline that most private companies have not needed to build.

Every public company must eventually include management’s assessment of internal control over financial reporting in its annual report under SOX Section 404(a), and EGCs remain exempt from the auditor attestation required under 404(b) for as long as their EGC status lasts. Newly public companies do get a transition period here: the SEC generally does not require management’s ICFR assessment in the very first annual report filed after the IPO, and companies typically have until their second Form 10-K to become fully 404(a) compliant. That transition period is a genuine accommodation, not a reason to delay the underlying work. A mid-sized company’s finance function should design, document, and test its key financial reporting controls well before that second 10-K is due, since building a control environment from scratch under deadline pressure produces weaker controls than building it deliberately in the first year as a public company.

Systems and reporting tools

Many mid-sized private companies operate on accounting systems and spreadsheet-based reporting processes that are functional for private reporting but not well suited to the volume of supporting schedules, XBRL tagging, and disclosure drafting that public reporting requires. Evaluating whether the existing ERP and reporting stack can support public company reporting, or whether an upgrade is needed, should happen early enough that any system transition does not collide with the first public filing deadlines.

7. Governance requirements

Nasdaq and NYSE American both require listed companies to meet corporate governance standards that go well beyond what a private, founder-led mid-sized business typically has in place. Building this governance structure takes time, particularly the process of recruiting genuinely independent, financially literate board members, and should begin well before the IPO filing.

Both exchanges require a majority independent board of directors, an audit committee composed solely of independent directors who satisfy SEC Rule 10A-3 and are able to read and understand financial statements, with at least one member possessing financial sophistication, and a compensation committee composed of independent directors responsible for determining or recommending executive compensation. Nasdaq additionally requires that independent directors select or recommend director nominees, that the company adopt a code of conduct applicable to all directors, officers, and employees, and that the company hold an annual shareholder meeting within one year of its fiscal year end with proxies solicited for all shareholder meetings.

Certain governance requirements are phased in for newly public companies rather than required immediately at listing, which gives a mid-sized company a limited but real transition period to complete board recruitment and committee formation. Relying on that phase-in as the primary plan, rather than beginning recruitment early, is a common source of last-minute pressure in IPO preparation.

The majority independent board requirement also has meaningful exceptions that a founder-led mid-sized company should understand before assuming it applies in full. A controlled company, generally one where more than 50 percent of the voting power is held by an individual, a group, or another company, can rely on exemptions from the majority independent board requirement and from the independent compensation and nominating committee requirements, though this exemption does not extend to the Rule 10A-3 independent audit committee requirement, which applies regardless of controlled company status. NYSE American separately permits a smaller reporting company to maintain at least 50 percent independent directors rather than an outright majority. A foreign private issuer can generally follow its home country governance practice in place of several exchange-specific requirements, subject to certain non-waivable rules and a disclosure obligation describing where its practices differ from the exchange’s standard requirements. A mid-sized company that fits any of these categories should confirm which exemptions genuinely apply before building its governance plan around the general majority independent standard described above.

For a founder-led mid-sized business, the practical starting point is identifying two to three genuinely independent, financially credible board candidates well ahead of the anticipated filing date, ideally individuals with prior public company board or audit committee experience relevant to the company’s sector. Recruiting the right people takes months, not weeks, and rushing this process to meet a filing deadline consistently produces weaker governance than the market and the company both need.

8. Scenarios that change the preparation path

The general framework above applies to most mid-sized companies, but several common situations change the preparation path meaningfully. Founders and CFOs should identify early which of these apply to their business.

International companies and foreign private issuer status

Only a company organized outside the United States can qualify as a foreign private issuer; a US-incorporated company cannot qualify simply because most of its owners or operations sit outside the US. A qualifying foreign issuer generally meets the test if 50 percent or less of its outstanding voting securities are held of record by US residents. Where more than 50 percent are held of record by US residents, the company can still qualify as a foreign private issuer only if none of three additional conditions is met: a majority of its officers or directors are US citizens or residents, more than half of its assets are located in the US, or its business is principally administered in the US. Companies close to these thresholds should have the analysis performed formally rather than estimated, since it determines which reporting framework applies for the life of the company as a US-listed issuer.

Foreign private issuer status changes the applicable reporting framework significantly. Such companies generally file their IPO registration statement on Form F-1 rather than Form S-1, can prepare financial statements under IFRS as issued by the IASB without reconciliation to US GAAP, file ongoing annual reports on Form 20-F rather than Form 10-K, and remain exempt from the US proxy rules. One exemption that no longer applies as broadly as it once did is worth flagging specifically: since March 18, 2026, directors and officers of foreign private issuers with a class of equity securities registered under the Exchange Act have generally become subject to Section 16(a) insider reporting on Forms 3, 4, and 5, following the Holding Foreign Insiders Accountable Act. Ten percent shareholders remain outside this new requirement, and Sections 16(b) and 16(c) still do not apply to foreign private issuers, but a mid-sized international company planning a US listing should no longer assume blanket Section 16 exemption for its directors and officers. Whether foreign private issuer status is advantageous overall depends heavily on the company’s specific circumstances and should be assessed with legal and accounting advisers who understand both frameworks, since the accommodations come with different reporting content and timelines that are not simply easier across the board.

Companies that principally administer their business in what Nasdaq defines as a Restrictive Market, broadly, a jurisdiction that does not provide the PCAOB with inspection access to auditors operating there, face additional listing requirements, including minimum offering size thresholds and, on the Capital Market tier, an outright restriction on listing via direct listing. International companies should confirm early whether their jurisdiction falls into this category, as it directly affects exchange and tier eligibility.

Companies that still need to raise capital

For a mid-sized company that needs the IPO itself to provide meaningful growth capital, rather than simply providing a public trading venue for existing equity, the listing requirements interact directly with the capital raise, though the two are not quite the same thing. The exchange test is generally based on the market value of unrestricted publicly held shares included in the offering, not on the net primary proceeds the company actually receives. Under current Nasdaq rules, companies conducting an IPO must satisfy this publicly held shares value solely from the offering, and NYSE American similarly requires an underwritten offering to include at least the applicable value of unrestricted publicly held shares. Net proceeds to the company depend separately on the split between primary and secondary shares, the offering price, and the underwriting discount, so a company should model these as distinct figures with its bankers rather than treating the listing threshold as a proxy for how much capital it will actually raise.

This has become more consequential following the tightening of listing standards through 2025 and 2026. Nasdaq raised the required market value of unrestricted publicly held shares for companies listing under the income standard, and both exchanges now require that this value be satisfied from actual offering proceeds rather than from the value of previously issued, now-unrestricted shares. In practical terms, a mid-sized company planning a Capital Market or comparable NYSE American listing should expect to structure an offering that clears $15 million in unrestricted publicly held share value at minimum, and should work through the actual net capital that structure will deliver with its underwriters rather than assuming the listing threshold and the operating capital need are the same number.

Companies that are not yet ready to raise at that scale, or whose growth capital needs are better served by private equity or venture growth capital in the near term, should treat that as a legitimate reason to delay the public listing process rather than force a smaller, more fragile offering into a tightening regulatory environment.

SPAC transactions as an alternative path

A merger with a special purpose acquisition company remains an alternative route to public markets for a mid-sized business, though the SPAC market has changed significantly since its 2020 to 2021 peak, and Nasdaq has proposed and adopted higher initial listing thresholds for the SPACs themselves through 2026, which affects the pool of SPAC partners available and the deal terms mid-sized targets are likely to see.

For a private operating company merging into a SPAC, the private company is frequently identified as the accounting acquirer for financial reporting purposes, meaning its historical financial statements, not the SPAC’s, become the basis for the combined company’s reporting going forward. The accounting mechanics behind that outcome are more specific than a simple acquisition, however. Because a listed SPAC is typically a shell that does not itself meet the accounting definition of a business, many de-SPAC transactions are accounted for as a reverse recapitalization, a capital transaction, rather than as a business combination under ASC 805. Getting the accounting acquirer determination and the business-versus-shell analysis right, and documenting both separately, is one of the areas of SPAC accounting most likely to require restatement if it is not addressed carefully at the time of the transaction. This means the same financial statement and audit preparation described earlier in this article applies in full to a SPAC transaction, and in practice on a more compressed timeline than a traditional IPO typically allows, since de-SPAC deal timelines are often driven by the SPAC’s own deadline to complete a business combination.

A mid-sized company evaluating a SPAC path should be candid about whether its accounting and reporting infrastructure can realistically be built to public company standard within the compressed de-SPAC timeline. Warrant accounting, earn-out structures, and the accounting acquirer and business determination discussed above are areas that have generated significant restatement activity across the SPAC market historically, and a target company entering this path should have its own technical accounting advisers reviewing these areas independently of the SPAC’s deal team. It is also worth noting that de-SPAC transactions now sit under enhanced SEC disclosure rules adopted in 2024, which introduced expanded sponsor conflict, dilution, and target company disclosures and, for many registered de-SPAC transactions, made the target company a co-registrant alongside the SPAC, moving de-SPAC liability and diligence expectations closer to those of a traditional IPO.

Complex or multi-entity group structures

Mid-sized companies that have grown through acquisition, that operate through multiple subsidiaries across jurisdictions, or that have complex intercompany arrangements face additional preparation work that a single-entity domestic business does not. Every material acquisition within the historical periods covered by the S-1 should first be classified: whether it was a business combination, an asset acquisition, or a transaction between entities under common control, since each is accounted for differently. Only transactions that qualify as business combinations require acquisition-method accounting under ASC 805, with a completed purchase price allocation supported by appropriate valuations of the identifiable acquired assets and liabilities; asset acquisitions and common-control transactions follow different measurement rules entirely. Every material intercompany arrangement needs to be properly eliminated in consolidation and, where relevant, properly documented for transfer pricing and related party disclosure purposes.

Companies with this kind of structure should budget meaningfully more preparation time than a simpler business of the same revenue size, and should engage technical accounting support specifically to review the historical acquisition and consolidation accounting well before the audit firm begins its own procedures on the S-1 periods.

9. Selecting underwriters at mid-sized scale

A mid-sized company’s choice of underwriting bank matters as much as its choice of exchange, and it is an area where founders and CFOs without prior capital markets experience often default to whichever bank made the first introduction, rather than running a genuine selection process.

Bulge bracket banks, the largest global investment banks, are generally not well suited to underwriting offerings for mid-sized issuers raising $20 million to $100 million. Their economics are built around larger deals, and a small offering does not receive the senior banker attention or the depth of sector research platform that makes the underwriting relationship valuable. For companies at this scale, the more productive conversation is usually with regional and mid-market investment banks that have a track record of underwriting offerings of comparable size in the company’s sector and a credible sector research platform to support the stock afterward.

Aftermarket research coverage deserves specific attention because it is easy to overlook during the deal process and consequential afterward. A mid-sized company that lists without at least one, ideally two or more, research analysts covering the stock will struggle to attract the institutional investor attention needed to build a liquid, properly valued trading market. It is worth being precise about how to evaluate this, though. Research coverage decisions are required under FINRA rules to be made independently by each bank’s research department, separate from its investment banking business, and a bank cannot properly promise specific research coverage or a favourable rating as an inducement to win the underwriting mandate. What a mid-sized company can and should evaluate is each candidate bank’s existing sector research platform, its analysts’ relevant expertise, and its historical track record of initiating and maintaining coverage on comparable companies for several years after listing, not just through the initial post-IPO quiet period.

Running a structured selection process, sometimes called a bake-off, in which two to four candidate banks present their view of valuation, positioning, and structure, gives a mid-sized company leverage in negotiating fees and terms that a single-bank relationship does not provide. Underwriting discounts for mid-sized offerings typically run higher, as a percentage of proceeds, than for large-cap deals, which makes negotiating this component, along with the allocation of legal and other deal expenses, meaningfully material to net proceeds.

10. The current listing market: what mid-sized companies are actually facing

Understanding the current state of the smaller-company listing market matters because the rules have moved meaningfully in the past two years, and a mid-sized company planning a listing needs to plan against where the requirements are now, not where they were when a comparable competitor listed several years ago.

The headline IPO market in 2024 and 2025 has been dominated by very large, often AI-related listings that raise hundreds of millions or billions of dollars and attract the bulk of financial media coverage. Nasdaq's full-year 2024 results showed 180 IPOs raising approximately $23 billion, and the exchange reported its seventh consecutive year as the leading US venue for IPO proceeds in 2025, with eligible operating company IPOs raising more than $24 billion. But the largest transactions within those totals represent a small number of very large deals rather than a broad base of mid-sized listings.

Beneath that headline activity, the market for smaller company listings, the segment most directly relevant to a mid-sized business, has been through a period of significant regulatory tightening. Both Nasdaq and NYSE American raised minimum share price requirements, increased the required market value of unrestricted publicly held shares, and moved to require that value be satisfied from actual offering proceeds rather than pre-existing share value. NYSE American increased the minimum value of unrestricted publicly held shares that must be included in an underwritten offering and raised its minimum listing price to $4.00 across all initial listing standards. These changes followed a period of concern among regulators and the exchanges themselves about the quality and sustainability of very small, thinly traded listings, and available data indicates a meaningful decline in the smallest micro-cap listings since the changes took effect, alongside continued, more selective activity in the segment just above that threshold, which is where most mid-sized businesses following this article will actually sit.

The practical implication for a mid-sized company is twofold. First, the standards you need to meet today are higher than they were even two years ago, and a preparation plan based on older benchmarks will fall short. Second, the exchanges and the underwriting community are placing more weight on the quality and durability of a listing, meaning genuine institutional investor interest, credible growth prospects, and clean financial reporting, rather than simply clearing the minimum quantitative bar. A mid-sized company that builds its accounting infrastructure, governance, and financial narrative properly is better positioned in this environment than one that aims to list at the smallest size the rules technically permit.

11. Common mistakes mid-sized companies make

Across the areas covered in this article, a small number of mistakes recur consistently enough among mid-sized companies pursuing a first listing that they are worth naming directly.

Starting the audit too late

The single most common and most costly mistake is engaging a PCAOB-registered audit firm too close to the intended filing date. Because the historical financial statements need to be audited to a standard that private company audits do not require, and because the audit firm needs time to understand the business, test controls, and work through any technical accounting gaps, starting this process less than a year before the intended S-1 filing consistently produces delays, additional fees for compressed timelines, and, in some cases, a need to push the entire listing back a full reporting cycle.

Treating governance as a box-ticking exercise

Companies that recruit board members purely to satisfy the independence and audit committee headcount requirements, without genuine regard for the value those directors will add, tend to end up with governance that looks compliant on paper but does not function well once the company is public and facing its first real test, whether that is a difficult quarter, an accounting judgment call, or a comment letter that requires board-level engagement. Investing real time in finding directors who bring relevant sector or public company experience pays off well beyond the listing itself.

Underestimating the ongoing cost

Mid-sized companies frequently budget carefully for the one-time costs of the IPO, legal fees, underwriting discounts, audit fees for the offering, but underestimate the recurring annual cost of being public: ongoing audit fees at public company rates, listing fees, D&O insurance, investor relations, additional finance headcount, and legal costs for ongoing compliance. Practitioner experience across mid-sized issuers suggests these recurring costs commonly land somewhere in the $1.5 million to $3 million annual range, though the actual figure varies considerably by filer status, industry, audit complexity, and how much of the compliance function is already built internally versus outsourced. Whatever the precise number turns out to be for a specific company, it needs to be modelled and built into the post-IPO operating plan from the outset, not discovered in the first year of public reporting.

Assuming the growth story alone will carry the deal

A strong growth narrative matters, but for a mid-sized issuer without the brand recognition of a larger, more established company, the quality and credibility of the financial reporting infrastructure behind that narrative is itself part of what investors and underwriters are evaluating. A company with a compelling growth story but visible weaknesses in its accounting, controls, or governance preparation will find that those weaknesses show up in valuation discussions, in the depth of underwriter due diligence, and in the tone of the SEC review process, regardless of how strong the underlying business is.

12. A readiness framework for mid-sized companies

Bringing this together, a mid-sized company assessing its own readiness for a Nasdaq or NYSE American listing should work through the following framework, realistically and honestly, before committing to a timeline.

On exchange and tier fit: map current revenue, stockholders’ equity, projected market capitalization at offering, and anticipated offering structure against the specific quantitative standards for the Nasdaq Capital Market, Nasdaq Global Market, and NYSE American Standards 2 through 4a described in this article, and don’t rule out the NYSE main board without first checking the earnings and market capitalization tests against your own numbers. Identify which combination is realistically achievable, and confirm with your bankers whether the anticipated offering structure will satisfy the publicly held shares value requirement from proceeds alone.

On financial statements and audit: confirm whether the company has, or can engage within the next quarter, a PCAOB-registered audit firm with relevant public company and IPO experience. Assess whether the two years of historical financial statements required for EGC status can be audited to PCAOB standard without significant restatement, and if not, begin the remediation work now rather than during the S-1 drafting process.

On technical accounting: inventory every significant accounting area, revenue recognition, leases, equity compensation, acquisitions, foreign currency, that lacks current, documented technical accounting analysis, and prioritise closing those gaps as a distinct workstream well ahead of the audit.

On close process and controls: test whether the current close process can realistically produce complete, reviewed financial statements within a 40 to 45 day post-quarter window, and begin redesigning the close timetable and building SOX 404(a) control documentation now, since this consistently takes longer than expected.

On governance: identify board and audit committee candidates now. Recruiting genuinely independent, financially credible directors takes months, and this workstream should run in parallel with, not after, the financial and accounting preparation.

On your specific scenario: confirm whether foreign private issuer status, a capital raise sized to satisfy listing requirements, a SPAC path, or complex group accounting applies to your situation, and adjust the preparation timeline and advisory team accordingly.

Companies that work through this framework honestly, twelve to twenty-four months before their intended listing date, consistently have a smoother, faster, and less expensive path to market than those that begin serious preparation only once the decision to list has been made public internally. The gap between a private company’s accounting and governance infrastructure and what Nasdaq or NYSE American actually require is real, but it is entirely closable with the right preparation, sequenced correctly, and started early enough.

Going public remains one of the most significant strategic decisions a mid-sized business will make. It is also, for the right company at the right stage, an achievable one, not the exclusive province of companies many multiples larger. The framework is public. The standards are published. What separates the companies that get there smoothly from the ones that stumble is not size. It is preparation.

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Summary: Going public on Nasdaq or NYSE American

Condensed from the full article

1. Why a mid-sized business considers going public

Driven by growth capital access, founder and investor liquidity, acquisition currency, enhanced credibility, or a path to being acquired. It brings recurring costs and permanent quarterly scrutiny, so it only makes sense where the benefit clearly outweighs those costs and the finance function can realistically be built to public company standard.

2. The realistic timeline

A realistic preparation timeline runs 18 to 24 months. The first six to nine months cover foundational, largely invisible work: engaging a PCAOB auditor, technical accounting documentation, close process redesign, and board recruitment. The next six to nine months cover formal deal preparation, drafting the S-1, and SEC comment rounds. The final two to four months cover the public filing, roadshow, and pricing.

3. Choosing your exchange: Nasdaq versus NYSE American

The NYSE main board should not be ruled out automatically. It offers a $10 million earnings test or a $200 million market capitalization test, plus distribution requirements including 400 round lot holders, 1.1 million publicly held shares, $40 million market value of publicly held shares, and a $4.00 price.

Nasdaq’s three tiers

The Global Select Market is the most demanding, with four alternative standards (earnings, cash flow, market capitalization, or assets and equity based), largely out of reach at first listing. The realistic tiers are the Global Market, with four standards each requiring a $4 minimum price, 1.1 million publicly held shares, and 400 round lot shareholders, and the Capital Market, with three standards each requiring $15 million market value of publicly held shares, one million publicly held shares, 300 round lot shareholders, and three market makers. The standard Nasdaq price requirement is $4, with limited $2 to $3 closing price alternatives on the Capital Market for companies meeting additional financial conditions.

NYSE American’s standards

A single tier with five alternative standards, Standard 1 through 4b, each requiring a $4.00 minimum price, differentiated by income, operating history, market capitalization, or assets and revenue tests. NYSE American has tightened its standards substantially through 2025 and 2026, moving materially closer to Nasdaq’s.

How to choose

With the standards gap narrowed, the decision now comes down more to sector fit, index inclusion, and analyst coverage than to which exchange has lower thresholds.

4. Emerging growth company status and what it means for a mid-sized issuer

Most mid-sized first-time issuers qualify as an EGC, revenue under $1.235 billion and no prior registered equity sale before December 8, 2011. EGC status ends at the earliest of four triggers, including becoming a large accelerated filer, generally $700 million or more public float plus other conditions. Benefits include two years rather than three years of audited financials, exemption from SOX 404(b) auditor attestation for as long as EGC status lasts (not automatically replaced once status ends, since that then depends on filer classification), reduced executive compensation disclosure, confidential draft SEC submission, and an extended standards adoption timeline. Confidential submission is not EGC-exclusive and does not stay confidential once the company proceeds to a public filing. The five-year EGC sunset should be built into the compliance roadmap from day one.

5. The financial statement and audit foundation

Historical financial statements

US domestic issuers file on Form S-1 under US GAAP; qualifying foreign private issuers generally file on Form F-1 under IFRS. EGCs need two years of audited financials rather than three, audited to PCAOB standard, which is more prescriptive than private company audits.

Choosing the audit firm

A strategic decision, not a continuation of an existing relationship. A Big Four firm isn’t required; what matters is PCAOB registration and relevant IPO experience.

The comfort letter and underwriter due diligence

Auditors must be positioned to deliver comfort letters at signing and closing; underwriters separately conduct their own financial and legal due diligence.

Building the disclosure package

Covers the business description, risk factors, MD&A, executive compensation, related party transactions, and use of proceeds.

Disclosure controls and the drafting committee

SEC rules require effective disclosure controls but don’t mandate a specific committee structure. A disclosure committee is a widely used, SEC-recommended practice rather than a legal requirement.

The MD&A and the growth narrative

For a first-time mid-sized issuer without brand recognition, the MD&A carries particular weight in making the investment case and typically takes several drafting rounds to get right.

6. Building the accounting infrastructure before you file

Technical accounting documentation

Every significant judgment, revenue recognition, leases, equity awards, acquisitions, foreign currency, needs documented analysis built as early as possible, not retrospectively.

The close process and internal controls

The close needs redesigning to meet the 40 to 45 day 10-Q window. Newly public companies get a transition period on SOX 404(a): the ICFR assessment isn’t required in the very first annual report, with companies typically compliant by their second 10-K, a genuine accommodation, not a reason to delay the underlying work.

Systems and reporting tools

Many private company systems aren’t suited to the volume of supporting schedules and XBRL tagging public reporting requires.

7. Governance requirements

Both exchanges require a majority independent board, an independent audit committee meeting Rule 10A-3, and an independent compensation committee. Certain requirements phase in for newly public companies. Meaningful exceptions exist: controlled companies can rely on exemptions from the majority independent board and compensation and nominating committee requirements, though not from the audit committee requirement, NYSE American allows smaller reporting companies at least 50 percent independent directors, and foreign private issuers can generally follow home country practice subject to certain non-waivable rules and disclosure. Board recruitment should start well ahead of filing.

8. Scenarios that change the preparation path

International companies and foreign private issuer status

Only a company organized outside the US can qualify. The core test is whether 50 percent or less of voting securities are held of record by US residents, with additional conditions if that threshold is not met, relating to US officers and directors, US assets, and where the business is principally administered. Foreign private issuer status means filing on Form F-1 and 20-F, IFRS financial statements without US GAAP reconciliation, and exemption from the proxy rules. Since March 18, 2026, directors and officers of foreign private issuers have generally become subject to Section 16(a) insider reporting, so blanket Section 16 exemption should no longer be assumed.

Companies that still need to raise capital

The exchange test is based on the market value of unrestricted publicly held shares included in the offering, not on net primary proceeds received, and this value must be satisfied from actual offering proceeds. Net proceeds depend separately on the primary and secondary share split, offering price, and underwriting discount, so these should be modelled as distinct figures with bankers.

SPAC transactions as an alternative path

The private operating company is frequently the accounting acquirer, but because a listed SPAC is typically a shell that doesn’t meet the accounting definition of a business, many de-SPAC transactions are accounted for as a reverse recapitalization rather than a business combination under ASC 805. De-SPAC deals now sit under enhanced 2024 SEC disclosure rules that move liability and diligence expectations closer to a traditional IPO.

Complex or multi-entity group structures

Every material acquisition should first be classified as a business combination, asset acquisition, or common-control transaction, since only business combinations require a purchase price allocation under ASC 805. Intercompany arrangements need proper elimination and documentation.

9. Selecting underwriters at mid-sized scale

Bulge bracket banks are generally not well suited to offerings of $20 million to $100 million; regional and mid-market banks with relevant sector experience are usually the better fit. Research coverage decisions must be made independently by each bank’s research department under FINRA rules and cannot be promised as an inducement for the underwriting mandate; what can be evaluated is a bank’s existing research platform and track record. A structured multi-bank selection process gives leverage in negotiating fees and terms.

10. The current listing market: what mid-sized companies are actually facing

The headline 2024 to 2025 IPO market has been dominated by very large, often AI-related listings. Nasdaq’s full-year 2024 results showed 180 IPOs raising approximately $23 billion, with a seventh consecutive year as the leading US venue for IPO proceeds in 2025. Beneath that activity, smaller company listings have been through significant regulatory tightening on both exchanges, including higher minimum prices and publicly held shares requirements funded solely from offering proceeds. The standards required today are higher than two years ago, and the market is placing more weight on listing quality than on simply clearing the minimum bar.

11. Common mistakes mid-sized companies make

Starting the audit too late

Engaging a PCAOB-registered audit firm less than a year before the intended filing consistently produces delays and added cost.

Treating governance as a box-ticking exercise

Recruiting directors purely to satisfy headcount requirements produces governance that looks compliant but doesn’t function well under real pressure.

Underestimating the ongoing cost

Recurring annual public company costs commonly land in the $1.5 million to $3 million range, varying by filer status, industry, and complexity, and need to be modelled into the post-IPO operating plan from the outset.

Assuming the growth story alone will carry the deal

Weaknesses in accounting, controls, or governance preparation show up in valuation discussions, due diligence, and the SEC review process regardless of how strong the underlying business is.

12. A readiness framework for mid-sized companies

Work through six areas honestly before committing to a timeline: exchange and tier fit against the standards in this article, including the NYSE main board; financial statements and audit readiness with a PCAOB firm; a technical accounting gap inventory; whether the close process can meet the 40 to 45 day window and SOX 404(a) documentation is underway; board and audit committee recruitment; and which specific scenarios, foreign private issuer status, a sized capital raise, a SPAC path, or complex group accounting, apply. Companies that work through this honestly 12 to 24 months ahead consistently have a smoother, faster, less expensive path to market.

Brolma Advisory

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