Building the company a public market expects
A listed company needs a board that meets exchange independence rules and an audit committee of independent directors, with transition periods available to newly listed companies, and recruiting those directors often takes longer than planned. Financial statements have to be audited under public company auditing standards by a firm registered with the PCAOB, which can mean re-auditing earlier periods. Internal controls over financial reporting need to be documented and tested well before management is asked to certify them. Equity plans, an insider trading policy, and committee charters are typically adopted ahead of the offering. Many companies start operating like a public company well before filing, so the transition is less abrupt.
Watching what the company says
Once an offering is being planned, the securities laws restrict how a company promotes itself, and statements that look like ordinary marketing can be treated as an improper offer. Executives should route interviews, conference appearances, and social media activity through counsel during this period. The company can usually continue normal business communications, and there are permitted ways to test investor interest, but the line between them is technical. Many issuers can submit a draft registration statement to the SEC confidentially for staff review, which keeps early comments out of public view. A communications policy adopted early prevents the kind of misstep that delays a timetable.
Sequencing the work
In a first planning session, we work backward from the target window to find the items with the longest lead times, usually audits, board recruitment, and cleanup of corporate records. We review shareholder agreements for rights that must be waived or will end at the offering, and we consider whether a traditional underwritten IPO, a direct listing, or another route fits the company's goals. We also talk about the personal side for founders and executives, including lock-up restrictions and how their holdings will be treated. Bring your capitalization table, financial statements, governing documents, and a list of investor agreements, and we can map the sequence from there.
