An IPO is a major event in the history of a technology company and represents value for its founders, employees, and customers. But it also creates a whole new set of rules, regulations and requirements that the company might due diligence not have adhered to as a private enterprise. To be successful, you must be well-prepared. This begins with a thorough IPO checklist.
The first step is to establish a fully-functional system that allows the company to maintain an unblemished record of financial performance that is able to withstand the scrutiny of regulators and shareholders. This is a top concern for the CFO’s team. It should be addressed before the IPO date. This involves implementing an automatic reconciliation process to eliminate any errors in data, as well as ensuring that the company is in compliance with IFRS and US GAAP, and setting boards committees like the audit, compensation, and special finance.
Another essential aspect is having a strong management team that is in a position to implement the expansion plans of the company when it becomes public. This is usually the most important factor, other than financial, to be considered when preparing for an IPO. Investors are looking for a leader team that has demonstrated their ability.
A seasoned auditor or advisor should conduct an IPO readiness test to determine the present state of internal control and accounting practices, as well as other issues that must be addressed before the IPO. This assessment should be conducted at the beginning of the IPO to allow for any issues to be addressed prior to being disclosed to investors or the SEC.
