26
Mar

Trouble Shooting the IPO Process

A 3-minute crash course on your initial public offering!

Taking a company public is not a simple process, in fact, it’s expensive, time-consuming, and invasive.

In this week’s episode of Victory TV Cate covers three issues that companies often experience during the IPO process and how YOU can avoid or prepare for them?

See the full video below or on our YouTube Channel Victory TV, otherwise, keep reading the truncated version below.

Victory TV - Vlog

1. Make sure you have an IPO dream team

Appointing an experienced team of advisers well before you begin the journey of ringing that bell is essential to the success of an IPO.

So, who should be on your team?

A BROKER

What they do:

  • The lead broker is normally the main underwriter of the offer.
  • They administer the activity surrounding the bid like assisting in preparing the offer document or prospectus.
  • They provide advice around investor materials, the type of investors to target, organise the investor roadshows, and dealing with the allocation and distribution of shares.
  • This is a key expense and will cost a company approximately 4-5% of the total funds raised.

LAW FIRM 

What they do:

  • Your lawyers will be responsible for drafting the necessary documentation.
  • They will run the due diligence process, this is the invasive part and you’ll want to hire lawyers that you trust.

ACCOUNTING AND AUDIT FIRM

What they do:

  • The auditor will assist in providing required audited financial statement information for inclusion in your offer document or prospectus.
  • The accounting firm will provide a sign-off on any forecast financial information that is required in your offer document or prospectus

2. Timing is everything

It’s no secret that the IPO process is arduous and time-consuming – those who will not only be organising and attending roadshows, attending due diligence meetings, preparing all relevant materials, and meeting with investors, will also be contending with their normal workload.

It’s recommended that you give yourself a minimum of 6 months before ringing that bell!

3. That loss of control after listing – the impact of public versus private

There are a couple of things to consider when switching from private to public

  1. You will no longer operate with a sole vision and will now answer to majority shareholders, investors, and new independent board directors. This switch usually requiring a massive cultural shift and places different pressures on the founder or founders.
  2. The company must report on its operations and finances, these reporting requirements can be very time consuming, especially for the CFO.

 

Do you have questions or thoughts about the IPO process? Include them in the comments below, that’s where the most important conversations happen, and where you can begin to find your community!

Remember to subscribe to our channel Victory TV, and I’ll see you next time with more helpful videos so we can help you EXCEED THE BENCHMARK!