IPO Preparation Checklist

Many private companies think of an initial public offering (IPO) as a strategic option for boosting their business. The process is not easy and carries significant risk. It requires strategic thinking and careful plan-of-action to ensure long-term success.

The first step in preparing an IPO is to write and present your equity story which explains to investors your plan for value creation and differentiates your company from competitors. This is crucial for establishing an attractive valuation and attracting the interest of analysts, investment bankers and underwriters.

The next step is to evaluate the leadership team and management. An IPO is a high-risk venture, so you want to be sure the management team you choose to work with can handle it. For example, an IPO could bring additional financial reporting requirements as well as tax implications, which could require https://designdataroom.com/it-due-diligence-checklist-for-further-developing-processes/ the addition of a tax or finance specialist to the executive team. Additionally, you will need to decide if you want to have dual class stock, which grants founders and other executives differential voting rights.

A solid track record of financial control and accountability is essential for an IPO. This includes a clearly defined SOX programme, which should be in place and revised prior to the IPO. It is also necessary to examine your current system of records. This includes capitalizations files, minutes material agreements, older option grants. This is essential for ensuring that you meet SEC and bank underwriter requirements. It’s important to find out whether there are any «material weaknesses» in the company’s control systems to ensure that you have the controls in place prior to going public.