How to prepare now to be able to take advantage of the IPO windows when the markets re-open

We have experienced challenging IPO conditions before, such as the global financial crisis in 2009 and the early days of the COVID pandemic. Clearly no two downturns are the same but experience shows us that it isn’t a question of “If” the IPO market will come back, but  “When?”. And “When” it does, companies need to be in a position to execute the transaction and thrive as a listed business. 

History would suggest that the market will re-open unevenly, with potentially short windows available for companies that are ready to take advantage of them. Companies may need to be ready to access IPO windows at short notice, rather than begin their IPO journey when markets begin to open up - early preparation is therefore paramount.

Although the goal of being public is the same, companies need to understand the nuances of each option.

Key questions to ask your company: 

• How much access to capital will your company need before and after going public?

• How much control of your company do you want to have on such matters as pricing and liquidity levels?

• Can the timetable for preparation of information for inclusion in the regulatory filings (e.g., historical financial information) be accelerated to access an open IPO window?

• What steps are required for your company to be ready for life as a public company (e.g. governance, financial reporting, processes and controls, etc.) and what steps can be taken to accelerate your public company readiness timeline?

Further, the IPO journey does not stop at the IPO itself. Companies need to ensure that they have the people, processes and systems across functions to be ready for the rigours of public markets.

This is how to get ready

Management should therefore undertake a public company readiness assessment well ahead of going public to address their readiness and evaluate steps required to achieve a successful transition to a public company and be prepared to meet shareholder and market expectations from Day 1. Such a readiness exercise will need to cover the following key areas:

• Addressing increased ongoing compliance and regulatory requirements, including financial reporting obligations;

• Identifying resource requirements, including where gaps exist in skill sets and bandwidth. In more complex areas like accounting, enlisting the right advice can help limit surprises, improve efficiency and reduce the time to market; and 

• Articulating the company’s strategy and KPIs for investing in broader societal issues, such as environmental, social and governance (ESG) efforts, together with identifying the associated governance, controls and processes to report and deliver on these metrics.

As challenging as the process can be, as noted above, the IPO itself is simply a milestone in a company’s life cycle and being public should be the mindset from readiness onward.

To protect and grow their business after going public, companies must be: 

• Ready to provide accurate forecasts to the investor community and share expectations and key performance indicators (KPIs); and

• Prepared for frequent communications with investors, analysts and media is essential for ensuring your company’s story is being told accurately, as public perception can directly affect share value.

Starting early is key to a successful IPO, particularly in times of elevated volatility which we expect will persist in the medium term.

Considering an IPO to fuel your company's future? We have an experienced team of professionals deployed in over 30 key global capital markets.

With our in-depth knowledge of the execution process and the rules and regulations governing the world’s leading capital markets, we can help clients; assess readiness, choose the right markets for their businesses and navigate every phase of the complex IPO process.

We will help you to understand what you need to know, and what you need to do, to complete an IPO. We can help you evaluate the pros and cons of an IPO, navigate the listing process and prepare your business for life as a public company, regardless of the market you choose to list on.