Taking a company public is a big deal. But market volatility, geopolitical uncertainty, and stalling valuations continue to impact the IPO landscape. Past experience doesn’t always help you address current challenges.
Gaining maximum value from each IPO requires confidence, decisiveness, and the right foundation. If your company is contemplating an IPO, its board can play an important role in guiding management to assess the risks and rewards.
How does management tell its equity story? Investors who understand industry dynamics and who know companies in your sector will wonder what makes your company special. Directors can help management present compelling evidence and present a consistent message to potential investors.
How well can management project and meet the numbers? Poor forecasting can mean big hits to your company’s stock.
How prepared are we to be a public company – not just go public? Even emerging growth companies must certify the effectiveness of their internal control over financial reporting and disclose any material weakness.
What key performance indicators (KPIs) does this industry use? It is important to understand that the metrics that companies use will also be under the microscope of the SEC.
What are the three risks that management worries about most? Directors should understand what the biggest risks to their company are and help management prioritize a risk resilient approach.
How are we handling cybersecurity threats? What cybersecurity blind spots exist at your company that require immediate attention?
How will the communications strategy change? The board will want to ensure that management is ready to handle new communication demands of a public company.
Is the executive team ready to lead a public company? The board should assess whether the executive team has the talent and aptitude to handle the regulatory requirements and investor scrutiny.
Is your board ready to be a public company board? Independence requirements could require your board composition to change.
Do I look good in stripes (jailhouse, not pin)? Increasing market volatility and a higher litigious business environment are legitimate concerns to ponder before going public.