IPO Preparation Checklist

Many private companies view an initial public offering as a way to increase their profits. However, this is a complex process and comes with significant risk. It requires detailed planning and strategic thinking to ensure long-term success.

To prepare for an IPO the first step is to formulate and present your equity story. This will communicate to investors how you plan to create value, and how your business is differentiating itself from the competition. This is important for establishing an attractive valuation and attracting the attention of investment bankers, underwriters, and analysts.

Next, you need to assess your management team and leadership. You want to make sure that your management team is capable of managing an IPO, which is a high risk venture. An IPO, for example, may have tax implications and financial reporting requirements which may require the hiring of a finance or a tax expert to your executive team. You will also have to decide whether you want to have dual-class shares, which grants the founders and higher-ranking managers different voting rights.

A solid track https://designdataroom.com/venue-by-dfin-vdr-review/ record of financial accountability is crucial for an IPO. This is why you need a well-defined SOX programme, which should be in place and revised prior to the IPO. It is also essential to review your current system of records including material agreements, capitalization files and historical options grants. This is crucial for meeting SEC and bank underwriter requirements. You should determine if the company has any “material weaknesses” so that you can fix them before going public.