What goes into the IPO process? A whole lot of work, for starters. For the 18-24 months leading up to the IPO, it’s going to be a lot of long nights and long emails between staff members as you get everything in order with auditors, regulators, and banks. However, there is advice to reduce the pain as you ramp up.
Many Challenges on the Road to IPO
As we discussed in our well-loved and well-attended webcast Startup Scaled to IPO: A Controllers Perspective, IPO readiness can be a challenge for the unprepared. Led by esteemed Controllers Council Board Members Brandt Kucharski of Grubhub and Mike Whitmire, CEO of FloQast, this webcast presented interesting insights on the path to IPO.
But a recent report from Controllers Council sponsor FloQast took an even deeper dive into the challenges and opportunities for controllers leading up to the IPO process. This guide, A Controller’s Guide to IPO Readiness Critical Considerations for You and Your Team, looked at what it means to be truly IPO ready, as well as the things you may need to work on as you go through the process.
“If you’ve determined you’re prepared to take the IPO road and are gearing up for the challenge, there are some critical considerations to follow along the way to make your IPO a more stress-less success. Most involve the importance of planning for the event well in advance, and taking concrete action to eliminate the possibility for surprises, deficiencies or negative outcomes.”
Necessary Considerations on Your Road to the Roadshows
According to the whitepaper, companies approaching an IPO will require 18-24 months of hard work to prepare for their IPO, and those in charge of the finance and operations side of the business need to be ready for the work that goes into it. From building a team to proving your value to investors, here are just a few of the things documented in your journey to an IPO.
Before even looking at the process, ask yourself if you can prove to banks and investors that you have the following:
- A predictable business model: This includes accurate financial forecasts quarter over quarter, and a good understanding of your competitive landscape, including the public companies in your space.
- A realistic plan that includes today’s workload with the added burden of IPO prep: Too often organizations don’t give themselves enough runway to enable a smooth course, and simply underestimate the real amount of time and work that is required.
- A critical grasp of the state of your pre-IPO organization: Scrupulously consider what needs to be done to prepare for this event, to avoid a last-minute scramble and the need for overly expensive or unplanned external services.
- A level eye on the future: Your IPO is a singular occurrence, so don’t neglect proactively planning for growth, expansion and added fiscal and operational review following the event.
Get the Guide: Controllers Guide to IPO Readiness
The path to IPO readiness is often one that companies are largely unprepared or underprepared to handle. Whether it’s the wrong people for the job or a late adoption of technology, there are many things that can cause weak results on your journey to IPO. The entire guide, Controller’s Guide to IPO Readiness, explores the following principles and challenges for companies on their journey to ringing the bell:
- Drafting Your Team: From the C-Suite down, everyone has to be in the right mindset to run an IPO. As a controller, it pays to know your role and know what skills you need to thrive.
- Be Ready for the SEC: One of the biggest topics discussed in our webcast was knowing what the SEC is looking for when you launch. Work with your audit team to prepare for the SEC requirements.
- The Clean Data Challenge: Paired with the IPO and SEC expectations, you need to have pristine data as you ramp up to the IPO. Financial information must be accurate and timely, and if not already in place, you must adopt a quarterly reporting structure as soon as possible.
- Tech Can Help: Knowing what technology you want to use early in the IPO process can reduce the hassles you face as you ramp up. IPOs are stressful, and implementations just add to the stress.
Download the entire guide here—and if you’re looking for more advice on refining your skills en route to an IPO, you might want to read The Controller’s Code: The Secret Formula for a Successful Career in Finance.
Written by FloQast CEO Mike Whitmire, The Controllers Code shows you the key skills they don’t teach you in school including leadership, team building, and innovation. Free to all new Controllers Council Members, this book offers deep insights on what it takes to lead your business now and in the future.
Additional IPO Resources