IPO Preparation Checklist

Many private firms consider an initial public offering (IPO) as a strategic option to grow their business. The process is not easy and comes with significant risks. It requires a strategic approach and meticulous plan-of-action to ensure long-term success.

The first step in preparing for an IPO is to formulate and communicate your equity story that communicates to investors your strategy for value creation and differentiates your company from home hdesigndataroom.com/it-due-diligence-checklist-for-further-developing-processes/ competitors. This is vital for establishing an attractive valuation and attracting the interest of investment bankers, analysts and underwriters.

The next step is to review the leadership team and management. An IPO is a high-risk venture therefore you need to ensure that the management team you choose to work with can handle it. An IPO for instance, could have tax implications and financial reporting requirements which may require the addition of a finance or a tax expert to your executive team. Additionally, you will need to decide whether you want to have dual-class stock, which grants the founders and the senior managers different voting rights.

A strong track record of financial accountability is essential for an IPO. This includes having a clearly-defined SOX program, which must be put in place and updated prior to the IPO. It is also crucial to review your current system of records. This includes capitalizations files, minutes material agreements, older option grants. This is vital to meet SEC and bank underwriter requirements. It is important to determine whether the company has „material weaknesses” to make them better before launching the company.