There are numerous challenges to the launch of an IPO, and according to the old adage, “by failing to prepare, you are preparing to fail.” However, with careful planning, strategic foresight and meticulous attention to the smallest details, companies can successfully conduct 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 comprehensive review of the company’s financials as well as documents that include historical performance projections as well as risk factors and internal controls. This process should be initiated prior to the scheduled IPO date so that companies can address any potential issues and delay the listing.
After due diligence is completed The next step would be to write the prospectus and registration statement. This requires a thorough review of the past and present performance of the company, as well as identification and evaluation of the financial risks as well as the drafting of strategies for raising capital. Ideally, management should be involved in the development of these documents since they are the best at assessing the company and can ensure that the content is in line with their vision for the company’s future.
Once the documents are finalized, they need to be filed with SEC and listed at the stock exchange. This process typically requires the help of an SEC filer or financial printer who has extensive experience with underwriter style and SEC formatting requirements. This experience can minimize liabilities and risks associated with erroneous submissions. If your team is ready to start with private markets, Carta’s liquidity solutions can help defer the listing, allowing you to start at the right time for your company.