Nantucket Nectars has many options that determines their future at the time of this case. They are faced with a decision to remain independent, go public, or sell. The managers are comfortable with any of the options; however, pros and cons exist for each possible decision.
Decision One - Go Public with an IPO
If NN were to go public and have an initial public offering, many benefits would arise. First, the company would receive instant capital funding. Given their financially problematic history, financially uneasy present, and robust growth plans NN would be able to settle many of their financing issues and reduce their worry of compromising their product for the sake of costs if they were to go public. An IPO would also allow the managers to remain in control. A large concern of Scott and First was how the company would be managed after a decision. With an IPO, at least Scott and First would be able to manage NN according to the plans they have already strategized. Going public would greatly increase the brand awareness of NN. They know the value of their “quirky” and “memorable” brand and feel that they have tremendous geographic growth opportunities. An IPO would generate more awareness and, in turn, generate more consumer demand for the product.
The downsides of going public also could arise. First, despite their control retention, management would have to now report to the shareholders associated with an IPO. Since it would be their “job” first to make the company money, but second to appease the shareholders, the managers may risk compromising or losing sight of their vision for the company. In conjunction with managers adopting the vision of the shareholders, NN could also risk losing the company culture by going public. More short-term goals would arise and the company could quickly lose sight of their rich history, vision, and mission