The Top 10 Questions You Should Ask Prior To Taking Your Company Public
Added on March 31, 2018
A Two Part Series - Part One...
Taking your company public can certainly be a rewarding progression in the business cycle. In recent years, newly minted public corporations have seen an average stock price increase of nearly thirty-one percent from their initial public offering (“IPO”). The IPO doorway is wide open, but does that mean you are ready to walk through it? Going public can be a complicated process. You need to carefully weight your options before making any decisions. The following information will help you determine if your business is ready to make its introduction on Wall Street. So without further ado, here is part one of the top 10 questions you should ask prior to taking your company public.
Will Investors Purchase My Stocks?
First and foremost, you must determine if investors will be willing to purchase your stock. You cannot afford to have the IPO fail. It will have a negative impact on your business and can even ruin everything that you have worked so hard to build. It is important to establish whether or not investors will be open to hearing your value proposition story. A good starting point is to research how shares of your publicly traded competitors have performed in the past and are currently performing. You can learn a great deal from their experiences.The next step is to start putting together your own value proposition narrative. Begin with your growth forecast. Wall Street investors look for factors such as how quickly your company is going to grow. Give them a good idea of the numbers that you are able to, and plan to produce.
What Is The Best Way To Deliver The Message To Investors?
Once you have formulated your value proposition narrative, it is crucial to deliver that message in a way that makes an impact with investors. A great deal of business owners make the mistake of having their head of marketing handle this incredibly important task. While your marketing chief is an expert at marketing your products and or services, he or she may not be well versed in the IPO marketing process. That requires interacting with investors and the media in a particular manner. It is important to consult with a professional that specializes in investor relations.
Is The Board Of Directors Positioned Properly?
Your board of directors becomes more visible and even more important once you take your company public. It is necessary to have the right team in place. Another factor to consider is that public companies must have a certain amount of independent board members. Your board will also need to form various committees that are responsible for particular functions. For example, you will need a board committee that is in charge of auditing. It is important to begin the process a year or more in advance of filing for the initial public offering. That includes distinguishing, engaging, and then recruiting new board members.
Is The Current Financial Staff Up For The Task?
The Security and Exchange Commission (“SEC”) has specific financial reporting requirements and regulations for publicly traded companies. If your current financial staff lacks this type of experience you need to work with an expert that does. SEC reporting is a serious matter and must be handled properly at all times. In addition, it is wise to consult with a human resources professional if your plan to offer stock and stock options to your employees. They will be able to put together the appropriate benefits packages.
Please Stay Tuned For Part Two Coming Soon
Navera Group provides public company readiness to businesses that are planning their initial public offering. Our program focuses on preparing your organization to become a publicly traded company, filing the registration statement, and preparing the financial reporting environment. Navera Group also provides much needed support throughout the entire IPO process. If you have any questions regarding an IPO situation, or would like more general information about our array of services, please contact us today. Phone: 617-356-7516; Email: Info@Naveragroup.com; Website: www.NaveraGroup.com