An initial public offering (IPO) can be one of the most significant events in a company’s life cycle. For many entrepreneurial businesses, “going public” represents far more than simply selling stock on a public exchange for the first time. More significantly, it is often viewed as the ultimate message to the business world that the company has made it.
Beyond the prestige factor, the completion of a successful IPO allows a company to raise new capital, which improves its ability to expand into new markets or grow through acquisitions. Going public can also help a company attract new talent with stock options and other equity awards, while rewarding initial investors with liquidity through dividend payments.
The allure of going public and its potential benefits should not, however, distract a company from carefully considering the necessary measures and planning that are required to successfully implement an IPO. The actual process can be time-consuming, and presents certain unique challenges that a company should be prepared to address.
Before – Preparing for an IPO
- Conducting a pre-IPO readiness assessment – is an IPO right for your company?
- Choosing an exchange and timing the market
- Gauging investor appetite
During – Executing an IPO
- Building the management team
- Corporate governance and a board of directors
- Choosing an investment bank
- Regulatory compliance: the financial health-check
- Investor relations and the IPO marketing process
- The road show and pricing the IPO
After – The post-IPO and realization
- Developing an aftermarket strategy
- Managing post-IPO risk and regulatory compliance
A company will need to consider that once public, it will need to meet additional requirements and continuing obligations that may require new skillsets, additional resources and changes to the business. Taking these requirements into consideration ahead of time and having a plan in place will help ensure the best chance of success for a company looking to go public and will help reduce the number of post-IPO issues that could arise.
Download our S-1 registration workflow chart for a visual understanding of the SEC commenting period.
Watch this video webinar: Going public: A “How-to” guide for making an IPO
“BEFORE” WILL BE POSTED NEXT WEEK