Benjamin Franklin is credited with the old adage “By not preparing you’re setting yourself up to fail.” When private companies begin their IPO process, it’s an important time that requires a meticulous and strategic preparation to ensure success.
The management of this complicated and highly regulated process can be time-consuming and overwhelming for any team. The IPO process involves multiple partners, including investors, bankers, underwriters and investors. It is vital to provide a clear and well-articulated equity story that is in line with market expectations and provides potential investors with an opportunity to match their interests with your company’s expansion plan.
One of the first steps in IPO preparation is to conduct an IPO readiness assessment. This examines what a business needs to appear like when it is publicly traded. This can help teams determine any areas that need to be addressed before the IPO date. Many venture-backed companies don’t have financial statements that meet the standards of compliance with public companies. A IPO readiness assessment will flag this issue, and assist legal and finance teams to correct the situation well before the IPO process gets underway.
After the initial preparation work is completed, it’s time to prepare for ongoing regulatory reporting. This includes obtaining access Securities and Exchange Commission’s (SEC) EDGAR filing system. It is crucial to establish a team within the IPO to collaborate with your law firm outside on the drafting of iXBRL and EDGAR examples of documents. This includes a person who is responsible for uploading exhibits onto the SEC and also working with the financial printer/SEC documents.
Leave a Reply