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5 Key Steps to Consider Before Your IPO

Is your company looking to go public? If so, it is time to start planning. Navigating public markets and the Initial Public Offering (IPO) process can be time-consuming and expensive both before and after the IPO process. The process of becoming a public company involves a variety of complex technical accounting, financial reporting, and accounting transformation tasks that must be managed appropriately and timely to ensure an efficient and effective IPO that does not get held up by the regulatory process.

To ensure a smooth and efficient process, here are the 5 key steps to consider before you go IPO.

1. Assessment & Preparation

The first step towards an IPO should be a detailed examination of the company in which business leaders and its investors consider whether going public is in the best interest of its long-term success. Going public opens access to more capital for your business and increases its visibility in the public eye. However, going public comes with significant preparatory costs, the need to comply with regulatory agencies, and increased disclosure requirements. Making sure that your business has the capacity to meet these requirements and will benefit from its new stakeholders is crucial before deciding whether to go IPO.

2. Corporate Governance & Reporting Systems

A crucial step to going public, as well as being public, is to evaluate your corporate governance and reporting systems. These are critical to maintaining a consistent and reliable accounting procedure that can comply with a public company’s financial reporting requirements. Before you become a public company, you should begin to act like one. Financial reporting during and post-IPO will be a more refined and time-intensive process where you must disclose your results in more detail. Auditors will also be reviewing under a higher standard of quality to confirm that you have made significant progress in building your financial reporting infrastructure to avoid costly errors, missing data, and incomplete disclosures that can significantly impact the reputation of the Company in the eyes of public shareholders.

3. IPO Timing

The timing of your IPO is also an important aspect to consider. Anything, from market conditions to geopolitics, can influence when you get out, as well as the performance of your stock post-IPO. An IPO typically takes anywhere from 6 to 9 months and is an intensive process that must be approached with great care and consideration. Seasonal trends are another consideration, as it could be beneficial to choose a time of year when the company has historically performed well.

4. Training Your People

The transition will affect more than just your company’s procedures and reporting, which is why clear communication with employees to address concerns about the process is so important. Training will also be an invaluable part of IPO preparation and planning and will help your business leaders handle the increased accountability and responsibilities that a public company can expect. Key personnel in a company’s management group will be significantly drawn into the IPO process and post-IPO period.

5. Professional Advisors

Taking a company public will require significant assistance from highly qualified advisors. You must start early to seek and engage professional advisors to make the transition as seamless as possible while reducing, as much as possible, the impact on day-to-day business operations. These advisors will help you with everything from regulatory compliance to due diligence on risks that may impact the IPO. Advisors play a crucial role in the IPO process, but they assist with more than just legal issues. Financial advisors can assist in helping assess the company’s readiness for the IPO and post-IPO reporting regimen, assessing the company’s valuation, and navigating financial risks that arise from the IPO.

How Centri Can Help

If you are looking to go public, Centri is ready to support you with a team of cross-industry experts who will advise you and your business through every step of the IPO process. We will help with building an IPO plan as well as helping to mitigate the accounting and financial risks that come with IPO preparation to ensure that your business has a seamless and successful public market entrance. Contact us to learn more about how Centri can help your company with its IPO preparation.

Christopher Mora

Chief Revenue Officer & Partner | Capital Markets Practice Leader | CPA

Christopher is the Chief Revenue Officer & Partner at Centri Business Consulting. He is the leader of the firm’s SEC Financial Reporting and Capital Markets Practice and specializes in the delivery of capital market readiness and financial reporting to clients across several industries, including fintech, financial services, life sciences, health/wellness, telecommunications, private equity, real estate, and construction. View Christopher Mora's Full Bio

Derek Kearns

Partner | SEC, Financial Reporting & SPAC Practice Leader | CPA

Derek is a Partner at Centri Business Consulting and the leader of the firm’s SEC, Financial Reporting, & SPAC Practice. He has more than 23 years of accounting experience in both public and private industries. View Derek Kearns's Full Bio