An IPO is among the most significant milestones in the life cycle of a technology company and is a symbol of value for founders as well as employees and customers. But it also imposes an entire new set of rules, regulations and standards that the company may not have adhered to as a private business. The key to success is to be prepared in advance, which starts with a thorough ipo preparation checklist.
The first step is to have a fully functional system that enables the company to maintain an unblemished financial report that can withstand the scrutiny of regulators as well as shareholders. This is a top concern for the CFO’s team. It should be addressed well before the IPO timeframe. This often includes setting up an automated reconciliation process to eliminate errors caused by manual input into the data, ensuring the company is on track in achieving IFRS and US GAAP compliance, and setting up the necessary committees for board members such as the audit as well as compensation and special finance.
A strong management team is also essential. They will be able execute the growth plans for the company when it goes public. This is often the most important non-financial factor to take into account when preparing an IPO. Investors want a strong leadership team that has proven their ability.
A seasoned auditor or advisor is required to conduct an IPO readiness evaluation to determine the current state of internal controls practices, accounting as well as other issues that must be addressed before the IPO. This test should be completed before the IPO to allow for any issues to be addressed before they are disclosed to investors or the SEC.