Any company preparing to transition from a private holding to public status must be prepared for a long process. Preparation for your initial public offering (IPO) can be expected to require at least two years of careful planning. A lack of sufficient IPO preparation will greatly diminish the chances your company will successfully transition with optimal stock valuation and financing potential.
As part of this preparation, your company should start acting like a public entity long before your actual IPO. You need to implement processes such as accounting and reporting, disclosure rules, strategic planning, legal counsel, internal controls and investor relations while your firm is still a private entity. You need a plan and a business model with a team dedicated to making your IPO successful, and you also need to build an investor communications function.
How to develop an IPO preparation team:
- Include internal and external resources.
- Include these important team members: your CFO, executive management, auditor, legal counsel, investment banker, underwriter, stock transfer agent and other advisory services.
- Give each team member a specified role. Selecting an overall project manager is essential.
- Establish communication protocols and develop methods for collaboration among all team members.
How to build a persuasive business model and demonstrate a position of strength:
- Develop a comprehensive business plan that clearly delineates your company’s strategic vision.
- Map out, and possibly implement, strategic growth-oriented transitions such as alliances, joint ventures and/or acquisitions.
- Demonstrate how your business effectively utilizes solid business controls and practices.
- Differentiate yourself from your competitors; share your mission and your strategy and how it is unique to your company.
You will also want to develop a communications strategy. An active investor communication function as part of your IPO preparation will increase market awareness of your business, generate demand for shares and prepare management concerning information needs when the IPO is enacted.
You will want to begin publishing quarterly and/or annual financial reports aimed at the investor community. Make sure your communications are both broad-based and targeted to reach intended audiences. During your IPO preparation, the company story must be accurately communicated while complying with all disclosure regulations.
Successfully going public with your company requires both a strong IPO preparation team and a plan to establish and communicate your strengths.
About Dave Hoy
Dave’s first career was as a highly successful national champion college basketball coach. He shifted careers to work in organizational development and over the past 20 years has brought his passion and experience in leadership and facilitation to dozens of organizations supporting; individuals, teams and entire organizations achieve high levels of performance and extraordinary results. Dave holds a M.A from the University of Alberta, an MBA in Human Resources from Royal Roads University and is an ICF Certified Executive Coach.