Completing an initial public offering (IPO) is a major milestone for your company, and a journey that involves many months (and in some cases years) of hard work and dedication. As you likely know, the timeline ends with the pricing and allocation of your IPO — a process that is short in duration but one of the most important steps in your path to becoming a public company.
What do you need to know about the pricing and allocation process to help you act in the best interest of your company and shareholders? Below, I walk you through the associated primary concepts.
The road to an initial public offering (IPO) can be long and arduous, and when not well planned and executed, subject to many missteps. Consider what happened recently to the Israeli biotech company, Vascular Biogenics (VBL Therapeutics). The company went public with an offering of 5.4 million shares. Less than a week later, the underwriters, Deutsche Bank and Wells Fargo Securities, LLC, terminated the offering when an existing shareholder did not fund payment for shares it previously agreed to purchase in the offering, according to a VBL Therapeutics press release.
While VBL’s pullback is clearly a draconian scenario, other mistakes abound as companies move toward an IPO. What are the most common mistakes on the path to an IPO? How can your company prevent them, and what can you do if you’re already in the thick of them? Our team of experts at Westwicke tackled these questions recently in a round-table discussion. Here are excerpts of the conversation.
Bookrunners play a significant role in the execution of a successful IPO transaction. Too often, though, a private company CEO does not fully appreciate the importance of selecting the right bank(s) to lead their IPO. It is vital to find the bookrunner(s) with the right combination of capabilities, experience, and “fit.”
Here are seven key considerations for evaluating potential bookrunner(s) for your IPO:
Your board is telling you to go public. Your peers are telling you that this IPO window may close at any moment. You believe your company is compelling enough for an IPO, but are you actually in the position to get one done in short order? How can you make an IPO move faster?
In my last post, I went over key — and sometimes overlooked — housekeeping items you can do to hit the ground running for an IPO, such as ensuring you have the right lawyers and auditors in place and getting a head start on your presentation and website. In this post, I’ll go over strategic choices that you’ll want to think through as soon as possible to improve your chances of a speedy and successful entry into the public markets.
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.
You worked hard to prepare for your IPO and made it to the first day of trading. Celebrations are certainly in order, but there is plenty of work in the pipeline. In fact, operating as a newly public company presents a whole new set of challenges.
When it comes to investor relations, the focus of your first 100 days as a public company is to educate and communicate with investors and analysts — and to build on the momentum of the IPO to establish credibility, refine your messaging and vision, and provide the information that key stakeholders need. During this time period, your investor relations (IR) function should be in full swing with set procedures, policies, and designated spokespeople in place. In addition to delivering a well-crafted message, meeting with investors, and responding to analyst requests, we recommend that you create a strategic IR plan for the next 12 months and start preparing to report quarterly earnings for the first time.
Below, we share our view of some of the most important tasks during your first 100 days.
Public healthcare companies often question the best course of action during quiet periods — those stretches of time during which they should limit their interaction with Wall Street due to their knowledge of material and timely information that has not yet been disclosed. Specifically, management teams struggle to figure out what the quiet period means for their investor relations (IR). Should they bring to a halt all communications with the investment community or have limited interaction? Should they answer only fact-based (or historical) questions or avoid inquiries altogether?
While the formal quiet period regulated by the Securities and Exchange Commission (SEC) comes with clear guidelines and regulations, informal quiet periods are far less defined, and variation exists in how much (or little) a company communicates with investors and analysts.
2013 was an incredible year for the United States initial public offering (IPO) market — the best since 2000. Of the 222 companies that went public, a record 55 companies (or 24.7 percent) were from healthcare, which experienced more IPOs than any other sector. Will healthcare break the 55 IPOs record in 2014? Time will tell.
Preparing for an initial public offering can be a daunting task. Once the process kicks off, the wheels spin faster and faster, with deadlines and opinions flying around from everyone involved. What can ease the burden and streamline the process?
Collectively, our team has helped hundreds of companies prepare for their IPOs, and seen the best and worst of what can happen during the process. We consider the year before the transaction critical and recommend these 10 must-do steps.
The road show you take in conjunction with your company’s initial public offering (IPO) represents an exciting and action-packed two weeks. Over that period, you will crisscross the country, meet hundreds of potential investors and spend way too much time on airport tarmacs. While your bankers will have thoroughly prepared you to deliver your “story” to the Street, I thought it would be helpful to share some other thoughts about road shows based upon the thousands of IPO road show meetings Westwicke team members have participated in during our Wall Street careers. Here is my list of the top 10 things bankers probably won’t tell you about IPO road shows:
- You are always on stage. Be respectful and professional at all times – not just in the meeting but in the waiting area and car, as well. Often you will be traveling with an institutional salesperson so remember that this person has a relationship with the analyst or portfolio manager you are about to meet…don’t say anything that would allow them to give negative “color” to their clients.
- Let the person on the other side of the table get the question out. I see this all the time: senior management begins to answer the question in the middle of the question. Let the analyst or portfolio manager completely ask his or her question. Then, clearly answer that question. Continue Reading