Considering An IPO? Start Early To Ensure A Successful Outcome
Private company management teams often struggle with the timing of an IPO process and where to begin. It’s important to take a proactive and strategic approach well before the process kicks into high gear. Here are some initial steps to get your program moving in the right direction:
Meet with equity research analysts
Since you’re likely being courted by investment bankers, it's in your best interest to also meet with equity research analysts covering your sector. It’s important to assess ahead of an IPO where the chemistry and buy-in are with individual analysts before the formal underwriter selection process begins 1. You’ll also benefit from their insights on positioning, investor receptivity, and comparable peers.
Cultivate investor interest
It’s become common practice for companies to meet with potential cornerstone investors prior to an IPO. By the time you launch your IPO, you should have already spent time with your top targets at conferences as well on non-deal roadshows. In addition to the inherent benefits of test driving the story and building a pipeline of institutional interest, the proliferation of crossover funds in recent years reinforces the case for meeting with investors at an earlier stage.
Develop a polished presentation
It’s essential to have a crisp, compelling story to tell when you’re ready to hit the road. Investors will be interested in a high-level overview of the company and market opportunity. Think about how you want your business to be perceived and how your performance should be benchmarked. Make sure your story is well baked before starting an outreach effort, but avoid detailed financial disclosures at this stage. Consistency will be key as investors and analysts will track what you say.
Assemble your investor relations team and support services
Too many companies treat investor relations (IR) as an afterthought when it comes to staffing and support services. Whether your IR effort requires a full-time, dedicated resource or can be managed by someone in an existing position (e.g., corporate development, finance), it’s important to be realistic in assessing the likely demands of the role. IR responsibilities include earnings prep, messaging and presentation development, marketing coordination, investor interface, analyst relations, corporate governance, and vendor management. Depending on the team’s IPO and public company experience, the retention of an external IPO advisor and investor relations consultant may also warrant consideration.
Nasdaq offers a suite of services to help companies prepare to go public and maximize their IR efforts on an ongoing basis. Our capabilities include:
Pre-IPO
- Nasdaq Private Market (NPM) provides structured liquidity solutions for investors and employees ahead of the public markets
- Strategic Advisory Services (SAS) offers support with IPO considerations and public market preparations
Post-IPO
- Strategic Capital Intelligence (SCI) identifies and maintains a solid pipeline of institutional interest
- Equity surveillance allows companies to track ownership in a timely manner
- Perception studies provide insights into investor sentiment
- Nasdaq IR Insight® enables access to research, estimates, call transcripts, news, and stock ownership along with an integrated CRM tool to manage investor interactions
An IPO is a milestone occasion that brings a host of benefits including access to capital, greater liquidity, visibility, and branding. It’s important to start the IPO process early to ensure a successful outcome. With these initial steps, you’ll be on your way towards a public company listing.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.