IPO Readiness
Beyond the Buzz: Crafting Your Path to IPO Readiness
After taking an extended vacation, IPOs are back big, and many companies are thinking about what it means to be IPO-ready. With an IPO being such a pivotal moment in a business’s life cycle, it definitely pays to prepare.
Our own Accounting Operational Evangelist, Stefan van Duyvendijk, sat down with DFIN’s Justin Lewis to discuss what it takes to ensure a company’s readiness for its initial public offering.
You can jump straight to their full conversation here or keep reading for some key takeaways.
#1: Early Preparation is Critical
Starting preparations for your IPO early isn’t an overly cautious move; it’s a strategic one. Consider the difference between a rushed, last-minute effort and a thoughtful, phased approach. The latter ensures readiness and helps build confidence and assurance as you prepare to go public. Starting as soon as possible is a good idea, but of course, we don’t always get as much of a “heads up” as we’d like.
“Ideally 36 [months], but you know, I realize that a lot of us find out kind of late. I think I was given like 12 months,” said Stefan.
#2: Choose the Right Partners and Technology
The synergy between your company and its partners, from auditors to legal advisors, plays a pivotal role in effectively navigating the IPO process. It’s all about finding those who share your vision and bring reliability, expertise, and innovation to the table. Take the time to choose the right partners because it’s a crucial step in the right direction for IPO readiness, helping you overcome challenges and seize opportunities quickly.
“When you’re evaluating your third-party technology providers… it is highly important that you have alignment in culture and you know it means for there to be long-term success with that relationship,” said Stefan.
#3: Use Your Roadshow as a Gut-Check
The roadshow isn’t just a series of meetings; it’s the ultimate test of your IPO’s market appeal and your company’s readiness to go public. A roadshow is a reality check, providing a unique opportunity to gauge investor interest and market expectations firsthand. It’s a moment where your preparation meets the market’s perception, offering invaluable feedback on everything from your proposed valuation to the strength of your business narrative.
In other words, view your roadshow as a vital feedback loop. It’s not a monologue; it’s a dialogue—one that could redefine your approach to your IPO. Embrace this opportunity to refine your message, validate your valuation, and build the momentum to carry you confidently to and beyond your public offering.
“So, leading up to the roadshow, you’re making phone calls, sending emails, meeting with people, doing all that stuff to bolster the hype behind the IPO and the pricing,” noted Justin. “It’s a good way to get an indication of your price point and where you have it in the S1. As you go through the roadshow, you get a good sensibility check: Is my minimum and maximum accurate? Maybe I need to raise it or adjust it. Typically, you tend to do it 7 to 10 days before you start trading.”
#4…Taking the Next Step
So, what’s your step toward being IPO-ready?
Easy. Watch Stefan and Justin’s full conversation to catch the rest of their insights into the process. Then, take inventory of where you are right now and what you need to do next to get ready to go public.
