An IPO is among the biggest milestones in a tech company’s lifecycle and symbolizes value for founders, employees, and customers. It also imposes new rules, regulations, and standards that have not been put on the company by private company. The most important thing to do is be prepared which starts with a complete IPO preparation checklist.
The first step is to have a fully functional system that enables the company to have an unblemished record of financial performance that can withstand the scrutiny of regulators and shareholders. This is a top priority for the CFO’s team, and should be addressed prior to the IPO timeline. This typically means creating an automated reconciliation procedure to eliminate any errors made by hand in the data, ensuring the company is in line with the required IFRS and US GAAP compliance, and setting up necessary committees for the board, such as the audit as well as compensation and special finance.
A solid management team is also important. They will be able to manage the growth plans for the company once it goes public. This is usually the most important aspect apart from financial, to take into account when making preparations for an IPO. Investors are looking for a management team that has proven their ability.
A seasoned auditor or advisor is required to conduct an IPO readiness test to determine the state of internal control and accounting practices and other issues that need to be addressed prior to the IPO. It is best to perform this early in the IPO process so that deficiencies can be rectified before they are disclosed to investors and the SEC.
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