Benjamin Franklin is credited with the old saying “By not preparing, you prepare to fail.” As private companies begin their IPO process, it’s an extremely crucial time and requires strategic planning and meticulous preparation to be successful.

This complicated and highly regulated process can be a challenge for any team. The IPO process requires multiple partners, such as investment bankers, underwriters and investors. It is crucial to provide a well-articulated equity narrative that is in line with market expectations and gives potential investors the chance to be aligned with your company’s growth path.

An IPO readiness assessment is one of the initial steps to prepare for an IPO. It is a consideration of what a company’s image will look like once it is listed. This allows teams to identify any gaps that need to be addressed prior to the IPO timeframe. For instance, many venture-backed companies do not have financial statements that meet the standards for compliance with public companies. A IPO readiness assessment identifies this issue and helps the legal and finance teams address the issue prior to of the IPO process starting.

After the initial preparation work is completed, it’s time to prepare for the ongoing reporting requirements of regulatory reporting. This involves obtaining access Securities and Exchange Commission’s (SEC) EDGAR filing system. It’s essential to establish a working team within the IPO to work with your law firm outside in the creation of iXBRL and EDGAR examples of documents. This will include a person who will be accountable for uploading exhibit files to the SEC and coordinating with your financial printer/SEC filer.

IT due diligence checklist