Founders + Leaders: IPO Readiness - The IPO Process with Nasdaq

TL;DR

Companies should begin IPO readiness 14 to 24 months before going public, with the most intensive work occurring during the final six to eight months. Nasdaq leaders recommend operating like a public company early, building reliable systems and reporting processes, selecting experienced bankers and law firms, developing investor relations, and evaluating exchange support and brand alignment. Read on for a practical breakdown of each preparation area.

Transcript

thank you for joining the ggv ipo boot camp i'm karen snow head of east coast listings at nasdaq and it's my great pleasure to be joined by jay heller nasdaq's ipo execution officer and joe brantuck nasdaq's chief client officer to provide some behind-the-scenes thoughts and advice as you think about accessing the public markets so joe let's start ... Read More

Key Insights

• 🍭 Companies should start preparing for their IPO 14 to 24 months in advance, focusing on systems, processes, and investor relations.
• 🗯️ Choosing the right bankers and law firms is critical for a successful IPO and SEC approval.
• 💍 An investor relations program is necessary to engage with the investment community effectively.
• 🧑‍🏭 The exchange decision should consider factors such as execution, investor relations support, branding opportunities, economics, and brand alignment.
• 🐕‍🦺 Nasdaq provides tools and services to help companies build effective investor relations programs.
• 🤨 Direct listings offer the opportunity to go public without raising capital, while IPOs involve raising capital through an offering price.
• 👨‍💼 Stacks or business combinations provide the opportunity to find partners and expand the business.

Questions & Answers

Q: When should a company start preparing for an IPO?

A company should generally begin preparing 14 to 24 months before its IPO. The most successful companies may operate like publicly traded businesses for 16 to 18 months before accessing the public markets.

Q: What happens during the final months before an IPO?

The intensive preparation period typically begins six to eight months before the IPO. During that time, the company drafts its S-1, works with law firms, and selects its syndicate and bankers.

Q: How should a company operate before going public?

It should begin operating as though it were already publicly traded. That includes establishing suitable systems and processes and being able to close its books promptly.

Q: What should a company consider when choosing IPO bankers?

The company should identify banking teams that understand its story and market. Those bankers should help differentiate that story for the investment community.

Q: What role do law firms play in the IPO process?

Law firms help the company navigate listing qualification and the SEC approval process. They also support drafting the S-1 and working through the process with the commission.

Q: What should an investor relations program include before an IPO?

Its foundational elements include an investor relations website for efficient disclosure and the ability to issue press releases promptly. It should also address messaging, investor targeting, and metrics for measuring engagement with the investment community.

Q: Should investor relations be handled internally or outsourced?

A company can appoint or hire someone internally to develop its investor relations program. Alternatively, it can engage an external adviser to help structure and staff the program and address the required preparation areas.

Q: What factors should a company consider when choosing a stock exchange?

The decision should consider execution, investor relations support, branding opportunities, economics, and brand alignment. It is particularly important because the exchange remains with the company throughout its life as a publicly traded entity, while bankers, lawyers, and consultants may have more transactional roles.

Summary & Key Takeaways

• Companies should start thinking about operating as a publicly traded entity 14 to 24 months before their IPO, focusing on systems, processes, and investor relations.

• Choosing the right bankers and law firms is crucial for a successful IPO, as they help with story differentiation and SEC approval.

• Companies should set up a robust investor relations program, including an IR website, press releases, and metrics to measure engagement with the investment community.

• The exchange decision is important, considering factors such as execution, investor relations support, branding opportunities, economics, and brand alignment.