There are many obstacles to launching an IPO, and as the old saying goes, “by failing to prepare, you are preparing to fail.” However, with careful planning, strategic foresight and an utmost attention to the smallest details, companies can successfully run an IPO.
The first step is to conduct a thorough due-diligence by your investment bank, accounting firm, and law firm (auditor). This includes a comprehensive review of the company’s financials as well as documents such as historical performance, projections, risk factors, and internal controls. This process should be initiated well before the planned IPO date, to allow companies to resolve any issues that could arise and delay the listing.
Once due diligence has been completed and due diligence has been completed, the next step will be to write the prospectus and registration statement. This requires a thorough review of the history and performance of the business, identification and evaluation of financial risks as well as the drafting of strategies for raising capital. The ideal scenario is that management should be involved in the development of these documents since they are the best at assessing the company and can ensure that the content is consistent with their vision of the business’s future.
Once the documents have been finalized, they need to be filed with SEC and listed on the stock exchange. This process usually requires the help of a financial printer/SEC filer, who has extensive experience with underwriter style and SEC formatting requirements. This knowledge can decrease the risk and responsibility associated with submissions that are not correct. Carta’s private market liquidity solutions can delay the listing and allow you to start your business at the ideal timing for your business.
