IPO Preparation Checklist
Benjamin Franklin is credited with the old adage “By not preparing for failure, you’re preparing to fail.” As private companies begin their IPO process, it is an important moment that requires a meticulous and strategic preparation to be successful.
Controlling this complex and controlled process can be overwhelming and time-consuming for any team. The IPO process involves multiple partners, including underwriters, investment bankers and investors. It is essential to present an articulate and clear equity story that addresses expectations of the market and provides potential investors with the chance to match their interests with your company’s growth trajectory.
One of the first steps in IPO preparation is to conduct an IPO readiness assessment. This takes into account the way a business will look like when it becomes publicly traded. This allows teams to identify any gaps that must be addressed before the IPO date. For instance, a majority of venture-backed companies do not have financial statements that meet the requirements for compliance with the public company. A IPO readiness assessment will highlight this issue and help legal and finance teams address this issue prior to when the IPO process gets underway.
After the initial preparation work is complete then it’s time to begin getting ready for regular regulatory disclosure reporting. This involves obtaining access to the Securities and Exchange Commission’s (SEC) EDGAR filing system. It’s essential to establish a team within the IPO to collaborate with your law firm outside on drafting iXBRL and an EDGAR example documents. This should include a person who is responsible for uploading exhibits into the SEC and also coordination with financial printers and SEC documents.
