Benjamin Franklin is credited with the old adage “By not being prepared you’re setting yourself up to fail.” As private companies begin their IPO process, it’s an important moment that requires a strategic plan and meticulous preparation to be successful.
This complicated and highly regulated process can be daunting for any team. The IPO process involves a wide range of partners such as investors, underwriters and investment banks. It is crucial to present an effective equity narrative that meets market expectations and gives potential investors an opportunity to understand your company’s trajectory of growth.
An IPO readiness assessment is among the first steps needed to prepare for an IPO. It considers the way a company will appear like when it is publicly listed. This allows teams to identify any gaps that must be addressed before the IPO date. For instance, many venture-backed companies do not have financial statements that meet the standards for compliance with the public company. An IPO readiness assessment can identify this issue and assists legal and finance teams correct the issue prior to of the IPO process kicking off.
Once the initial preparation is completed, it’s now time to get ready for ongoing regulatory reporting. This includes gaining access to the Securities and Exchange Commission (SEC) EDGAR system. It’s also crucial to establish a working group within the IPO team to collaborate with your external law firm to create EDGAR and the iXBRL instances documents. This is a key person who is responsible for uploading exhibit files to the SEC and coordinating with your financial printer/SEC filer.
