10 Questions for any Company Considering an IPO Now
1) Is this really the right time for your company to go public? Are there minimum milestones? 2) What, besides putting cash in the bank, are you trying to accomplish with the IPO? 3) Is an IPO the best option now? What about late-stage private or hybrid liquidity options? 4) How do you select investment bankers who will keep your company's interests first? 5) As the IPO market heat up, how will you keep the attention of the right bankers and analysts? 6) NASDAQ or NYSE ? 7) What can I do to minimize the risk of leaving too much money on the table? Are auctions a viable choice? 8) Does it make more sense to keep IR in house or should we use an outside firm? 9) What convinces a fund manager to buy at the IPO rather than letting the issue season in the marketplace? 10) Which time-consuming parts of the process need your complete attention and which can be delegated?
| The financial markets have evolved dramatically in recent years. Investors have changed, risk-tolerances have changed and regulations have changed. IPOs executed in 2012 with structures and processes just as they were in yesteryear are likely to underperform their potential. Current market volatility, more intense investor scrutiny and rising expenses have made the process of selling shares to the public much more complex and nuanced.
Still, the rewards of a public offering are unmatched. A public company controls its own destiny, can use equity to motivate employees, attract the best new recruits and have an easily valued currency for acquisitions. Public equity drives the entrepreneurial process and our capital markets.
While public offerings aren’t for every company, for those with great aspirations and sustainable business models, a well-executed IPO is still universally recognized as the crowning achievement in a young company’s existence and the most highly-visible milestone of success. The rewards can be great but the challenges are significant.
Avoid the Unexpected Chutes and Rocks: Leverage Class V's Unmatched Experience to Smooth Out Your Process Navigable whitewater rapids are ranked Class I to Class V by the American Whitewater Association, with Class V as the most rugged. Adventurers who haven’t attempted these unpredictable waters, characterized by “unavoidable waves and holes or steep, congested chutes with complex, demanding routes” are strongly urged to work with a guide who has done so. We see parallels between steering through Class V rapids and threading through the IPO process.
Class V was founded by Lise Buyer, Wall Street veteran turned corporate IPO strategist. Ms Buyer has managed the IPO process as an institutional investor, investment banker, research analyst, board member and internal IPO coordinator. It is this unique combination of experience and perspective that differentiates Class V from all other advisory firms. Buyers and sellers view an IPO, the process and the prospects, very differently.
Class V works with a very small number of select companies contemplating public offerings. We prefer to engage with clients up to a year prior to a potential offering, using the time to gain a deep understanding of management’s and the Board’s goals, motivations and operating style. This background allows us to design processes sure to surface the right partners, structure and expectations for the transaction. In addition to working closely with the CEO and CFO on the logistics of the transaction, Class V will leverage our first-hand experience, observations and connections from more than 20 years of direct involvement with over 1,000 IPOs to help clients develop and effectively deliver an on-target message to potential investors. As the final piece of an engagement, Class V will work with management to structure and find (hire) the right solution to ensure on-going, mutually beneficial communications with investors.
We focus on reducing demands on the CEO and CFO 's time during the process, allowing them to focus on running the business and on the critical deal-related decisions. We accomplish this by facilitating the day-to-day elements of the IPO process, serving as both as a strategic sounding board and an extra set of hands to offload time-consuming logistics work, again leveraging unmatched experience. The economically tangible result of these efforts should be a more cost-effective transaction, an S-1 more closely tuned to management's specs, a more compelling roadshow and as a result, a higher share price, both at the time of the IPO and in the sustainable aftermarket. We stand apart from all others offering IPO advice as we have first hand experience with IPOs from all the key perspectives: issuer, banker, institutional investor and board member. Our clients gain a frontline view to each of these perspectives to make better informed decisions, both during the process and beyond. We do not believe that "because that's how it's always done" is ever an acceptable answer to any IPO-related question. For more information, please contact us at LB@ClassVGroup.com. February 2009 IPO Commentary: WSJ's All Things D Financial Times Letter to the Editor on the Google IPO November 2011 CNN Money/Fortune Column on preparing for a successful IPO Lise's Bloghttp://classvgroup.blogspot.com/ |
3130 Alpine Road Suite 288-414
Portola Valley California 94028
LB @ClassVgroup.com