Have you weighed all elements of going public and their impact on you, your team, and your company? If you’ve come this far, you’re probably ready to prepare for your IPO. Here are a few important considerations to help you focus on what needs done.
AUDITED FINANCIAL STATEMENTS
Make sure your financial statements are close to being final. You’ll need two full years of audited financial statements per SEC regulations if you qualify as an “emerging growth company.” While some companies choose to include three years, but if you had different auditors during those years, you may need your current auditors to redo prior years.
ACCOUNTING ISSUES
Do you have any sensitive issues in your current accounting policies? Your auditor can help you decide how best to handle those issues before your IPO. For example, the SEC has certain evolving “hot button” issues that you’ll want to consider. Your auditors will have access to experts in their headquarters to find solutions.
KEY METRICS
Almost everyone will have their opinion on what key metrics your operations should meet or exceed, especially your investors. You know your business better, however, so make sure you have a solid grasp on the key metrics that will work best as your company grows and changes.
STOCK VALUATIONS
You’ll need to perform regular stock valuations so you can price your option grants on a go-forward basis. An independent valuation expert can help you perform these quarterly, or even more often, depending on your granting schedule.
BOARD OF DIRECTORS
Make sure your board of directors comprises the best in their field, who bring a variety of strengths and skills to your company. You’ll need to assess each member to satisfy the exchange listing requirements. Beyond these legal requirements, make sure your board members can help you grow a public company. It takes time to find the right directors to strengthen your company.
EXECUTIVES AND COMPENSATION
You also need to create a senior management team with the strongest candidates. Investors look at the strength of your management team when considering your IPO. Also start creating compensation practices, including incentives that befits a public company. This includes compensation for your Board.
INTERNAL CONTROLS
Your independent auditors should also advise you of any “material weaknesses” or “significant deficiencies” in your internal financial controls. Understand how they will affect your exchange service review and be prepared to talk transparently about them with underwriters and the public.
CORPORATE GOVERNANCE
Ensure you know what good corporate governance is for a public company and starting behaving that way. Public companies focus on compliance, so develop a compliance culture, and work with your counsel to create your corporate policies and codes of conduct.
FINAL THOUGHTS
These are only a few of the issues you should consider getting ready for your IPO. The best way to prepare is to partner with a listing expert who has taken hundreds of companies public successfully. They have the deep experience to smooth out the process, and they can connect you with the host of advisors, underwriters, legal experts, investment bankers, and others you’ll need.
If you’re ready to take your company public soon, contact Listing Partners to schedule a free consultation. Discover how the right experts can save you time and money during your IPO.
