The old adage, attributed to Benjamin Franklin states, “By failing to plan for failure, you’re preparing to fail.” When a number of private companies embark on the IPO process, this is a crucial stage which requires a thorough planning and preparation to ensure success.
Managing this complex and regulated process can be overwhelming and time-consuming for any team. The IPO process involves a wide range of partners such as investors, underwriters and investment banks. It is vital to provide an articulate and clear equity story that addresses market expectations and provides potential investors with the chance to align themselves with your business’s growth trajectory.
An IPO readiness assessment is one of the first steps to prepare for an IPO. It is a consideration of the way a company will appear like when it is publicly listed. This helps teams identify any deficiencies that need to be addressed before the IPO date. Many venture-backed businesses don’t have financial records that meet the standards of compliance for public companies. A IPO readiness assessment will flag this issue and help finance and legal teams correct the situation well before the IPO process begins.
Once the initial prep work is complete then it’s time to begin prepping for regular regulatory disclosure reporting. This includes gaining access Securities and Exchange Commission (SEC) EDGAR system. It is also essential to establish an internal working group within the IPO team to work with your law firm to draft EDGAR as well as IXBRL sample documents. This will include a person who is responsible for uploading exhibits to SEC and working with the financial printer/SEC files.
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