Your IPO is a long-term transformation that affects your business, organization and corporate culture. So, it’s best to be prepared for the journey ahead. Successful IPOs demand diligent planning and disciplined execution followed by successful realization.
Consider these top 10 IPO readiness challenges – along with key tasks – that you’ll face through the three stages of a successful IPO value journey.
1. Preparing for the IPO value journey
The first step in a successful IPO value journey is a careful exercise in defining success. Proper preparation necessitates that you:
- Develop a compelling strategic plan
- Evaluate which pre-IPO transactions could enhance your value
- Understand main stock price drivers
- Know which financial and non-financial measures matter to investors
- Benchmark to ensure competitiveness on key measures
2. Keeping your options open
Evaluate alternative exit strategies and transaction options, including investment by a private equity firm, strategic sale through the M&A market, JVs and alliances, to name a few
3. Timing the market
Start early and take time to prepare. Companies that tend to do best usually have taken the time to make critical changes a full year or two before going public.
4. Building the right team to take you public
Recruit and retain an experienced team of advisers, including an underwriter, auditor and attorney, as well as investor relations executives.
5. Building your business processes and infrastructure
Establish a strong infrastructure for accurate financial forecasting. This facilitates regulatory compliance, shields you from risk and provides guidance to meet or beat market expectations.
6. Establishing corporate governance
Create corporate governance policies that inspire shareholder confidence. Bear in mind too that public company boards require a different skill set than private company boards. Changes may be in order.
7. Managing investor relations and communications
Keep investors informed by regular communications. Don’t underestimate the importance of investor relations, a function absolutely important of public companies, but largely absent in the private sector.
8. Conducting a successful IPO road show
Convey a compelling equity story in the road show. Know thyself, but also know thy stakeholders. You are then prepared to properly convey your company’s performance and business plan. Make all messaging realistic, consistent, clearly communicated, sustainable and supportable over the long-term.
9. Attracting the right investors and analysts
Cultivate long-term relationships with investors by being proactive. Understand their preference in reporting patterns and how they want to receive the information.
10. Delivering on your promises
Provide shareholder value by keeping promises, and using your IPO proceeds for the purposes that were communicated as a part of the IPO plan.
What has challenged your organization along the IPO journey? What kind of insight could you add to this list?