How to get ready for life as a public company
Once you have decided to explore going public, you will need to map out all the necessary steps to ensure you have what it takes to win in the capital markets.
Making sure you’ve undertaken a thorough readiness assessment will help you to:
- Save costs by having transparency on how to get IPO ready
In an integrated approach, the assessment helps owners and managers map out what organizational changes are needed prior to a public offering. - Gain valuable insights into IPO leading practices
An IPO readiness assessment helps you to decide which options are aligned with your business strategies and objectives, delivers a base case, and builds the road map for being prepared for being a public company. - Raise transaction certainty in unpredictable IPO markets
The right team, story, timing and pricing are all pivotal to success. We see every IPO as transformational, so it should occur over time in a structured way that maximises transaction value; this is an important step in the life cycle of the entrepreneurial businesses we serve. Achieving readiness will provide flexibility in timing and help ensure a strong debut in the capital markets.
Typical objectives in this vital planning phase include:
- Defining an IPO base case, which will become important information for the assessment
- Identifying the IPO readiness gaps and assess the efforts required to get ready
- Training the key people on IPO leading practices and regulatory requirements
- Prioritizing the gaps in your IPO roadmap
To help meet these objectives, we’ve used our experience working with business owners and management teams of family businesses, scaled up and high-growth companies as well as private equity or venture capital-held companies considering their strategic options for funding for growth, including a public listing, across multiple industries.
From this experience, we’ve developed a holistic IPO readiness assessment framework – a structured approach designed to guide the company through a successful IPO transaction to a strong debut in the IPO market. If you determine that an IPO is right for you, this can also evolve into a program management framework:
Step 1: Strategy – Recognizing the IPO location and relevant exchanges that determine the regulatory benchmarks and prepare a compelling equity story
Step 2: Structures – Understanding the issuing company options and group structure and find out the governance and legal requirements
Step 3: Taxes – Preparing for tax on all levels: company, shareholder and transaction taxes
Step 4: Financial – Understand the issues – and any concerns – regarding external reporting, business plans, forecasting and prospectus
Step 5: Systems – Set out internal controls and audit, enterprise risk, compliance and IT
Step 6: Functions – Define the roles and processes around investor relations and compliance for before, during and after going public
Step 7: Leadership – Determine and modify the roles, composition and compensation of the C-suite, board of directors and HR
Step 8: Timeline – Determine the IPO timeline and consider regulatory approval processes, create and evaluate Plan B, and understand project management and roles
Making sure you’re ready to make the right move
Unpredictable IPO markets make IPO readiness and internal preparation more important than ever. While challenging markets will come and go, it’s the companies that are fully prepared that will best be able to create value and fully leverage the IPO windows of opportunity whenever they are open.
The most successful IPO candidates often spend 12-24 months – or more – building business processes and infrastructure, recruiting executive and consulting talent, getting in front of financial and reporting issues and mastering the essential board of directors’ commitment to go public.
During the journey to become a public company, an organization must prepare not only for the defining moment of the IPO ceremony – the ringing of the bell – but also for a whole new phase of corporate life after the IPO takes place.
This is why market outperformers treat the IPO as a long-term transformational process. And while our IPO readiness framework can help you make sure you’re ready, it is just one part of successful preparation and delivery of a transition to life as a public company. To help you navigate these challenges, we’ve also developed a comprehensive Guide to going public – this should ensure you’re ready to make the right moves, at the right time, to achieve lasting listed success.