The IPO Express Lane: Steps to Expedite Your IPO, Part I
Despite some signs of resistance, initial public offerings (IPOs) continue to move along at a robust pace. With fears that the window may close, some company boards and management teams find themselves scrambling to enter the mix before it is too late. Perhaps by reflex, the first thing they often do is pick up the phone to call an investment bank.
However, before you join their ranks and take your first banker pitch, there are some key – and sometimes overlooked – steps you can take now to ensure you hit the ground running.
In this first post, I go over some essential housekeeping items you can get started on today. Then, in a post to follow, we will cover several strategic choices that you’ll want to think through now, before the frenzy of the IPO process kicks in.
IPO-experienced lawyers and auditors
It is not uncommon for early stage, privately-held companies to find the services (and costs) of “brand-name” corporate attorneys and auditing firms excessive or unnecessary. And for the purposes of operating as a private enterprise, they may be right. However, the execution of an IPO — especially one on an accelerated schedule or for a company with a complex mix of technologies and intellectual property — can be a very different story.
Though easy to forget, your auditors and lawyers will play a crucial role in getting your S-1 ready in a timely fashion. Your bankers will also have their lawyers available during the process, but they will expect that your vendors have a reliable grasp of what is most important, especially from the perspective of the Securities and Exchange Commission (SEC). Do your vendors have a personal rapport with the specific examiners at the SEC who review S-1 submissions? Do they have a track record of working through multiple rounds of questions and responses with the SEC, especially regarding an IPO? If not, getting vendors in place who do could be one of the easiest steps you can take right away to substantially improve your chances of going public.
The IPO process is complicated enough as it is, and usually involves a highly compressed working schedule. There just isn’t enough time (or tolerance) for your vendors to learn along the way. Even the smallest amounts of frustration or distrust creeping into the working group can derail your chance of a successful offering.
Try to get your presentation investor-ready before you shop banks
Not only do investment bankers sometimes carry out their own due diligence to vet or support IPOs, but they also rely heavily on your existing investor materials to determine your messaging and potential valuation. And this process can have a direct impact on their interest in and enthusiasm for participating.
Your presentation can also influence the S-1 drafting process. A tightly messaged presentation can help align all parties in your working group from the get-go, potentially shaving weeks off the schedule.
With the JOBS act enabling investor meetings so much earlier in the process for many IPOs, working calendars have rarely been able to allocate very much time to the presentation after the S-1 is submitted. There is a very good chance that you will find yourself doing valuable test-the-waters meetings with a presentation that your working group has barely spent any time on. This is certainly less than ideal.
Do your IPO a favor by getting a step ahead with a public investor-ready presentation as early as possible, preferably even before potential bankers show up to pitch you their business.
Update and align your website
For many companies, the process of going public often brings about a desire for a fresh website. However, if not planned properly, the implementation can become problematic. It is easy to take for granted, but once you have an S-1 out there, your company website will probably also need to play by the rules of the SEC. If you release new web content that comes across as “material information” for an investor, you might find yourself dealing with delays because your S-1 doesn’t line up.
Best practice would be to make any significant changes to your website as early as possible, ideally even before your IPO org meeting. Website revamps post S-1 submission are fairly common and certainly doable, but you will have to ask yourself if the regulatory dance such a process can require is worthwhile.
Take care of these three household items as soon as possible, and you’ll already have made meaningful progress toward your IPO.
Stay tuned for my next post about strategic choices that you can make as you explore an IPO to potentially improve your chances for a strong entry to the public markets. Need help staying on track with your IPO preparation? Be sure to check out our Timeline of Your IPO, or get in touch to learn how we can help.
ICR Westwicke is the largest healthcare focused investor relations firm in the country. We provide customized investor relations programs and independent capital markets advice to small and mid-cap healthcare companies.
Tags: ipo
Leave a Reply