Taking a company from a lean, innovative start-up to a flourishing IPO-ready enterprise taught me things I would never have expected. The journey from our initial ideas, through multiple transformations, to a publicly traded company takes endurance. You’ll leap so many hurdles along the way. But it’s all attainable when you are prepared for the journey. Learning from those who have gone before means having everything in place and avoiding expensive and resource-intensive surprises. These are the things to have in place before you start your progress toward your IPO:
1. Be sure your business model is a fit for public markets
Investors want to get in on the ground floor of stocks offering growth. To have a successful IPO, you must show investors your business is scalable, transparent, and resilient. Investors are looking for a company that will grow and thrive over time, ensuring a favorable return on their investment.
You need to articulate the core elements of your business and why investors should place their faith in you.
2. Start early
We started Softline with a team of just ten people. It took until 2022 for the company, eventually known as Noventiq, to launch our IPO. We spent years moving toward this goal, making decisions strategically.
You should begin assessing your company’s readiness for an IPO at least 18 to 24 months before your IPO date. An early start means more effective fundraising.
The earlier you begin making decisions with a public offering in mind, the more prepared you will be to make that transition.
3. Tune up your organizational readiness
The IPO process is intensive; be sure you are ready to show your company is well-positioned for growth.
This starts with a talented executive team and a well-rounded board of directors. Having players who work together toward the company’s strategic objectives is key. Be sure that everyone’s vision is compatible and that everyone is working toward the same goals.
4. Be sure your books are up to snuff
Your financials will be examined in great detail in the run-up to your IPO.
It can pay to work with consultants and independent auditors in advance. They can help you identify the areas where you need to improve your reporting.
If changes are needed in how you track your business, be sure that the relevant people get the right training and the time to make transitions. It can be difficult to adjust. Make sure everyone has the time and patience they need.
5. Check yourself for compliance with SEC rules
Go ahead and allocate budget and resources specifically toward compliance. This is an intensive process, but essential for a green light from the SEC.
Employees will need training on IPO-specific practices. It will take time, but it is valuable when it comes time to file your S-1 registration.
Having it all right the first time means less time making corrections later on. The smoother things go at the beginning, the better your experience will be.
6. Be ready for scrutiny
Audits can be intimidating. They are also a mandatory part of the IPO process. This is why the steps involving institutional readiness and a keen eye toward good bookkeeping are so vital.
Having all your financials up to snuff and your business in compliance makes this part go quicker and more smoothly.
7. Commit to a long but rewarding process
Once you begin the process of launching an IPO, you are in for a long and intense process. Be sure your company has the funding, stamina, and positive growth needed to successfully navigate this process.
Every year, hundreds of companies make their initial public offering. To join the ranks, you need to be sure you are ready to take that next step.