Public company CEO shares lessons learned from IPO process

1. Be prepared, and flexible

“You can’t choose your window. You just have to be ready,” Singh emphasizes. The journey to AZEK’s IPO began in 2019, with meticulous preparation, including building an engaged board and audit committee. The company had also been operating as if it were already public to identify readiness issues and iron out kinks before its public debut.

AZEK initially scuttled its IPO plans, only to pivot quickly and capitalize on an unexpected market window a few months later that arose despite the pandemic. “We went from a board meeting to being public in less than a month,” Singh recalls, highlighting the importance of creating agility and optionality through a strategic public readiness process.

2. Embrace the role of governance and compliance

Operating as a public company brings a new level of scrutiny and governance. “We had been audited as a private company, but the transition to PCAOB audits was another level,” Singh says. He points out that audit processes and compensation undergo significant changes, requiring thorough documentation and adherence to new standards.

However, he notes that the transition offers an opportunity to adjust compensation in ways that aren’t possible as a private company. “If you want to pay someone something, you can do it at the IPO,” Singh says.

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3. Choose the right team around you

The roles of CFO and general counsel are pivotal, but Singh admits, “I didn’t expect the general counsel to be such an important part of the IPO process.” It’s a position that private companies don’t always consider carefully, but it’s key to creating the requisite governance and compliance culture. On the finance side, he opted to recruit a new CFO with public company experience.

The selection of the right investment banks and advisors is also crucial, with Singh noting the importance of choosing partners who can represent the company effectively and help navigate relationships with investors. “When it comes to marketing the company, you can’t replace yourself,” he says. “But you also need to create well-informed analysts to help the market understand your story.”

4. Establish credibility with conservative estimates

Singh strongly believes in achievable financial projections. “We intentionally put out conservative numbers at the IPO,” he says, “to build trust with new investors.

“The IPO was the start of our journey, not the end,” Singh says, adding that AZEK sold shares three months after the IPO at a price that was well above the initial price. “And our value creation journey only benefitted from our IPO and the public profile we created,” Singh noted.

5. Prepare for the distraction

Going public is a highly demanding process that can divert attention from day-to-day operations. Singh suggests building internal resiliency to alleviate some of this pressure. “Are you ready for this distraction?” he asks, suggesting that companies ensure they have a strong business foundation and culture of success before embarking on an IPO.

“We had to bring some really experienced people on board to make it through the process,” Singh says. “And if I had to do it all over again? I would have assembled the team sooner.”