1. Decision One Is How the Company Will Enter the Public Market
A traditional IPO uses underwriters to market and distribute shares. A direct listing follows exchange-specific rules without traditional firm-commitment underwriting.
Traditional IPO and Direct Listing Serve Different Goals
| Issue | Traditional IPO | Direct Listing |
|---|---|---|
| Distribution | Underwriters market and distribute shares | No traditional firm-commitment underwriting |
| Capital | Commonly raises primary capital | May include primary issuance where permitted |
| Pricing | Uses book-building and allocation | Follows exchange-specific listing mechanics |
Distribution
- Traditional IPOUnderwriters market and distribute shares
- Direct ListingNo traditional firm-commitment underwriting
Capital
- Traditional IPOCommonly raises primary capital
- Direct ListingMay include primary issuance where permitted
Pricing
- Traditional IPOUses book-building and allocation
- Direct ListingFollows exchange-specific listing mechanics
The structure should fit the company's broader capital markets strategy.
Marketing and Liquidity Need Early Planning
- Define whether raising new capital is a primary objective.
- Identify existing holders seeking liquidity.
- Assess underwriter-led demand building.
- Confirm exchange eligibility.
2. Decision Two Is Which Issuer Status Applies
Issuer classification affects disclosure and internal-control obligations. Emerging growth company status and Exchange Act filer status are separate analyses.
EGC Status Can Reduce Certain Requirements
As of 2026, the EGC annual gross-revenue threshold is $1.235 billion, subject to the other statutory exit conditions.
- Track the five-fiscal-year maximum period.
- Monitor non-convertible debt issued during the prior three years.
- Reassess status if large accelerated filer status applies.
Public Float Requires a Separate Analysis
Public float affects filer classification under Exchange Act Rule 12b-2 and should not be treated as the same test as EGC status.
- Model non-affiliate public float.
- Track the applicable measurement date.
- Reassess filer status as the company grows.
3. Decision Three Is Which Exchange Fits the Company
NYSE and Nasdaq apply their own initial and continued listing standards. Price, public float, holder distribution, financial tests, and governance can affect venue selection.
Initial Listing Standards Should Be Tested Early
- Compare applicable financial and market-value tests.
- Review minimum price and publicly held share requirements.
- Check holder-distribution and governance standards.
Exchange requirements operate alongside federal securities regulations.
Continued Listing Risk Matters Too
- Model post-offering price and public float.
- Review continuing governance standards.
- Plan for exchange notices if a standard becomes deficient.
4. Decision Four Is How the S-1 Tells the Company Story
Form S-1 should describe the business consistently across financial statements, MD&A, risk factors, and the business section. Growth claims should match operating data, known trends, and identified risks.
Material Disclosure Should Drive the Narrative
- Identify material risks before drafting promotional language.
- Align MD&A with known trends and uncertainties.
- Check financial and segment disclosures for consistency.
- Prepare for SEC comments.
Drafting questions may require a separate disclosure statements review.
IPO Forecasts Require Extra Caution
The PSLRA safe harbor for forward-looking statements does not apply to statements made in connection with an initial public offering.
- Separate historical facts from projections.
- Identify the assumptions behind forecasts.
- Compare public claims with internal budgets and board materials.
5. Decision Five Is How Insiders Will Handle Liquidity
Founder and executive liquidity should be planned before trading begins. Lock-ups, Section 16 reporting, insider-trading policies, and Rule 10b5-1 plans impose different requirements.
Lock-Ups Are Negotiated Offering Terms
- Identify holders subject to contractual restrictions.
- Review permitted transfers and waiver provisions.
- Coordinate liquidity with offering documents.
Rule 10b5-1 Plans Have Their Own Conditions
- Adopt plans when the insider is not aware of material nonpublic information.
- Account for applicable cooling-off periods.
- Review limits on overlapping and single-trade plans.
6. Decision Six Is Whether Public-Company Controls Are Ready
IPO readiness also requires systems for SEC reporting, disclosure controls, certifications, and internal control over financial reporting.
SOX Readiness Should Start before Effectiveness
- Build disclosure controls for Section 302 certifications.
- Document internal control over financial reporting.
- Coordinate finance, legal, audit, and disclosure teams.
- Determine which EGC accommodations apply.
Certification Duties Come from Different Provisions
Section 302 certifications arise under 15 U.S.C. § 7241. Section 906 certifications are separately addressed under 18 U.S.C. § 1350.
- Assign responsibility for certification support.
- Establish escalation procedures for disclosure issues.
7. Decision Seven Is How Reporting Will Work after the IPO
Going public creates recurring Exchange Act obligations. Management needs an operating calendar for reports, selective-disclosure controls, proxy work, and shareholder communications.
Reporting Needs an Operating Calendar
- Prepare for Forms 10-K and 10-Q.
- Create procedures for events that may trigger Form 8-K.
- Control selective disclosure under Regulation FD.
- Plan proxy workflows.
After listing, these duties may require public company representation.
Shareholder Communications Need Clear Ownership
- Assign responsibility for investor-relations communications.
- Coordinate earnings releases with SEC filings.
- Review proxy and voting requirements.
8. Frequently Asked Questions
Can an IPO registration statement be submitted confidentially?
The SEC permits nonpublic review of qualifying draft registration statements, subject to later public filing requirements. Eligibility and timing should be confirmed.
Does EGC status eliminate SOX compliance?
No. EGC status provides accommodations, including an exemption from Section 404(b) auditor attestation, but it does not eliminate management's internal-control obligations.
Can a company switch exchanges during IPO preparation?
Potentially. The issuer must satisfy the chosen exchange's standards and adjust listing, governance, and transaction planning as needed.
Can executives adopt Rule 10b5-1 plans after an IPO?
Yes, if Rule 10b5-1 conditions are met. Trading remains subject to applicable cooling-off periods and insider-trading restrictions.
9. Plan the Pre-Filing Decisions with SJKP
SJKP's attorneys can assess offering structure, issuer status, exchange eligibility, disclosure strategy, insider planning, and public-company readiness before filing.
21 Apr, 2026
