There are numerous challenges to launching an IPO and, as the old adage goes, “by failing to prepare you are preparing to fail.” However, with careful planning, strategic thinking, and a meticulous focus on particulars, companies are able to 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 review of the company’s financials as well as documents, including historical performance, projections as well as risk factors and internal controls. This process should be carried out well before the scheduled IPO date to enable companies to address any issues that may arise and potentially delay the listing.
After due diligence has been completed the next step will be to write the prospectus and registration statement. This involves a thorough examination of the history and performance of the company, identifying and evaluation of the financial risks as well as the drafting of strategies to raise capital. Management should be involved in the creation of these documents, since they are the best individuals to know the company’s needs and ensure that the content matches with their vision.
After the documents have been finalized and filed, they need to be filed with the SEC and then listed on the stock exchange. This process typically requires the assistance of a financial printer/SEC filer, who has extensive experience with underwriter style and SEC formatting requirements. This experience can minimize the risk and responsibility associated with submitting the wrong information. Carta’s private market liquidity solutions can delay the listing, allowing you to launch your business at the ideal time for your company.