The old adage credited to Benjamin Franklin states, “By not preparing you are in danger of failing.” When a number of private companies embark on the IPO process, this is a crucial moment that requires meticulous planning and preparation to be successful.
The management of this complicated and highly regulated process can be a challenge and time-consuming for any team. The IPO process requires multiple partners, such as investment bankers, underwriters, and investors. It is crucial to present an articulate equity narrative that meets market expectations and gives potential investors an opportunity to align with the growth trajectory of your business.
One of the first steps in IPO preparation is to conduct an IPO readiness assessment, which considers what a business needs to look like when it becomes publicly listed. This will help teams discover any gaps that require attention early enough to be addressed prior to the IPO timeframe. For instance, the majority of venture-backed companies do not have financial statements that meet the requirements for compliance with the public company. An IPO readiness assessment can identify this issue and helps legal and finance teams correct the issue prior to of the IPO process getting underway.
Once the initial preparation work is finished now is the time to begin getting ready for regular regulatory disclosure reporting. This involves gaining access to the Securities and Exchange Commission (SEC) EDGAR system. It’s essential to establish designdataroom.com/venue-by-dfin-vdr-review a working team within the IPO to work with your law firm outside on drafting EDGAR and iXBRL example documents. This should include a person who is responsible for uploading exhibits to the SEC and coordination with financial printers and SEC files.
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