Planning to take your start-up company public? That’s great news because it means you’re well on the road to success. It is a big step, and a long journey filled with ups and downs.
For investors to see potential in buying shares, they need to like what they see. Although what comes after the IPO is significant, it’s equally important to make sure that anything and everything you do before going public is in favor of impressing future buyers.
Think of it like opening the doors of your house and offering to sell everything inside it; when people come in, you need to ensure that everything on sale looks immaculate.
Here’s a list of things you need to take care of before you hang up the ‘For Sale’ sign for your shares:
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Lay All Your Cards on the Table
As a company in the process of going public, you have a moral and legal responsibility to be transparent about what goes on behind the scenes. Once the IPO process begins, your company will automatically come under a lot of scrutinization.
From intellectual property rights and government correspondence to meeting minutes, everything is going to be examined by someone.
It’s good to get your financials and communications in order so that the IPO goes smoothly. Investors are more likely to view your company favorably when they see that you have nothing to hide–transparency is key.
Effective Communication Inside & Out
Preparing for an IPO involves a lot of work–evaluating financial statements, poring over bills, and form submissions, etc. There’s a new problem to solve every day, new people to talk to, and the workload almost doubles for your current team. It’s essential to make your employees feel part of this entire process and compensate them adequately for their efforts.
It won’t be in your favor to lose some of your most loyal employees because you failed to look out for them while attempting to get your company off the ground, and they’re your best PR.
Communicate to your team what you expect from them, assure them of your support, and clarify complicated procedures. This could be as new for them as it is for you.
Similarly, you need to be very sensitive to what kind of information you’re sharing with the public. In general, you should be as transparent as possible as previously suggested, but also know when you have to maintain a quiet period. Know all your communications deadlines inside and out.
Alternatively, outsourcing the services of industry professionals who specialize in the processes that are a part of an IPO reduces the strain on your existing workers, and also bring in third-party opinions that can be quite valuable.
A team of attorneys, financial analysts, and tax advisors can make a massive difference to the frazzled atmosphere of a company that’s getting ready to go public. If you feel you’re ready, even hiring a boutique PR firm would be a good idea. They can help you navigate through the required communications deadlines and regulations and clean up your branding materials, allowing you to radiate the right tone and message.
Numerous tax-related issues can arise during the process. These can be smoothed over by hiring tax advisors who are experienced in dealing with IPO-related tax concerns. A presentation that has all its bases covered makes a better impression on investors.
Media Coverage and Publicity
Going public with your company’s shares is a huge decision that has the potential to change the future of your company. A successful IPO is elevated by positive publicity. The announcement of an IPO is followed by scrutiny from not just investors, but also financial journalists and other industry professionals who keep up-to-date with the latest in the start-up sector.
How you communicate with them sets the stage for your reputation as a public company. The clearer your communication channels with reporters and industry professionals, the more interest they’ll have in you and your company–and by extension–trust.
It can’t be overstated–keeping the media and analysts informed of the company’s activities, issuing clear press releases that are detailed and simple to read, and responding to them quickly and with the right information is so important. This is again where a boutique investor relations firm or PR team can be helpful as they have the time and bandwidth to coordinate these activities.
Think Long-Term and Prepare Well
Going public is a big part of a company’s journey to success. An immense amount of teamwork, effort, and planning goes into a successful public offering. It’s like riding a rollercoaster, with ups and downs, but if you’ve tightened your seatbelts, you can ride it out safely and prosperously.
Winning the trust of the investors is perhaps the most important task of them all–they need to have faith in your vision for the future of your company. When you’ve achieved that, the rest falls into place on their own. Put your best foot forward, and watch your company grow.
Please see the resource below to learn the key differences between two capital markets options, SPACs vs IPOs, that your company might deal with when going public.
Infographic provided by Riveron – offering expert divestiture services