Not here they aren’t.
The new 2014 IPO Study from Proskauer Rose LLP is a must read for those of us in the capital markets business of working with IPOs. Click here to download the study.
The report examines in great detail:
- The JOBS Act
- Financial profiles and accounting disclosures
- SEC comments and timing
- Corporate governance
- IPO expenses
- Deal structure
- Sponsor-backed companies
Most relevant to Vintage are 1.) the JOBS Act, and the findings regarding Emerging Growth Companies (EGC) confidential IPOs vs. traditional IPOs and of course 2.) IPO expenses. But I will add a third point, the merging of those two as shown in the Proskauer Rose LLP (with added magnifying glass) chart below.
Generally, the lionshare of our S-1 work is with EGCs. Our intelligent value fee structure has always appealed to micro and small-cap companies. However, it was enlightening to read exactly how intelligent our value can be. A $400,000 delta (savings) is a lot of intelligent value for any size IPO. It’s over 1/10th of the total cost of the entire IPO process for an EGC.
Click here to download the S-1 workflow illustrated whitepaper.
From the Wall Street Journal:
What Proskauer found was that on average, the reported expense of going public as an emerging growth company was $3.7 million last year, versus $5.9 million for non-EGCs.
This could be partly explained by the fact that non-EGCs tend to be bigger companies.
No, says Proskauer’s Frank Lopez, co-head of the capital markets practice. While he couldn’t pinpoint the reasons, he explained that “larger companies [expenses] can be just as simple, but just generating more money [ROI],” implying that costs should be pretty standard across all deals.
Yes, cost should be standard across all deals. Pinpointing the reasons for financial printing cost control is easy as there are only a few, meaningful variables.
- Accuracy of typesetting is NOT NOT NOT a variable: the S-1 is either accurate or not. And not is not an option or upgrade.
- The SEC comments and revisions process can be a variable, but no direct trend was found in the report other than some sectors seem to have more comments than other sectors.
- Physical printing is a variable, with large high-profile IPOs needing paper, ink and postage.
The last variable to highlight is that many IPOs are handed an “overabundance” of rush charges from rush changes. Vintage clients, fortunately, don’t face that: we have always believed that “rush” is inherent within the S-1 registration process – and not an add-on billable cost. It is the job.
Click here to learn more about our capital markets services.
Have a nice day.