Benjamin Franklin is credited with the old adage « By not planning for failure, you’re preparing to fail. » When private companies begin their IPO process, it is an extremely crucial time and requires a meticulous and strategic preparation to be successful.
This complicated and highly regulated process can be overwhelming for any team. The IPO process involves multiple parties, including investment bankers, underwriters and investors. It is vital to provide a clear and well-articulated equity story that addresses expectations of the market and gives potential investors with the opportunity to align themselves with your business’s growth path.
An IPO readiness assessment is one of the first steps needed to prepare for an IPO. It considers what a company will look like when it is publicly listed. This allows teams to identify any deficiencies that need to be addressed before the IPO date. Many venture-backed businesses don’t have financial statements that meet the standards of compliance with the public company. An IPO readiness test identifies this issue, and helps legal and finance teams correct the situation well https://designdataroom.com/it-due-diligence-checklist-for-further-developing-processes/ in advance of the IPO process getting underway.
Once the initial prep work is complete and you’re ready to start preparing for ongoing regulatory disclosure reporting. This involves obtaining access Securities and Exchange Commission’s (SEC) EDGAR filing system. It’s essential to establish a team within the IPO to collaborate with your outside law firm in the creation of iXBRL and EDGAR example documents. This should include a designated person who will be accountable for uploading exhibit files to the SEC and co-ordinating with your financial printer/SEC filer.