How To Perform A Company Review Before An IPO?

How To Perform A Company Review Before An IPO?

When a company is at the point that they are considering an IPO, there is a lot of work to do before that desire becomes a reality.  An IPO refers to an initial public offering, and when a private company becomes public, a lot of things change.  The business is no longer under the control of one private owner or group of owners, and now must answer to its stock holders.

That doesn’t mean you lose your company or won’t have any say in the day-to-day operations or big business decisions, it just means that it’s no longer just you calling the shots.  For some business owners, this set up comes and welcome news because they feel bogged down by the private company structure.  For some it is a negative element, but the potential financial rewards are well worth it.

 Considering the fact that going public is a huge undertaking for a company, it stands to reason that many steps must be followed before it becomes a reality.  One such step is performing a complete, wide-sweeping review of the company to ensure it is ready for the IPO and the public investors and markets are ready for the company.

The Benefits

 Performing the review professionally and in the manner that successful companies do it has several benefits.  First, it lets potential investors know that your company is run properly and it is professional and shows them how you do business.  This ends up raising the investor’s confidence levels, which just might make the IPO go more smoothly.


Any review requires analysis of what is happening at the current time and what has been happening in the recent past.  For a company going public, the current corporate structure and capital structure should be looked at along with the IPO advisers you’ve hired to help with the process.  These advisers are experts in the IPO process and most likely the review process.  You may need the structure to change so it can adapt to the changes that will take place within the company as time rolls along.  Some of the roles and responsibilities may have to change to become more attractive to the public company ideal.  

 Basically, every element of your company should be set up and run so going public makes sense.  And that is why analyzing different departments and the entire structure is so critical.  Sometimes, this review might provide information that suggests or even demands that an IPO is just not in the cards, while other times it will let you know that you’re not too far off at all.

 When performing the review, it will become apparent whether specific financial qualifications are being met and whether the IPO strategy actually meets all of your short and long term business goals.  If your advisers and your management team look through the financial records, the structure and the goals and determines that an IPO is the wisest business decision, then the process moves on to the next step.

Set Up a Team

 If and when it is time to move ahead, you must put together a team that will be able to get the job done.  The various parts of the IPO process require specialized skills and experience, which is why a team is required.  Some of the members must come from the inside of your company and some must come from outside.  Company management has to be part of the process, as do lawyers, tax advisers, auditors and underwriters.

This team works together based on the company review, to bring all different elements of the IPO together and get the offering ready for the public.

 Set the Time Line

 Once the review is done and the team is in place, a time line for the execution of the public offering is created. The workload is intense and it literally takes months for the whole thing to come together. Issuing an IPO from start to finish is a very expensive and time-consuming project, but with the hope of great financial dividend in the end.

You will need to know the types of securities that will be issued, how many should be issued and what the initial price will be. Many factors go into these decisions, but that is the point of putting together an experienced IPO team and performing a thorough company review in the beginning. Sometimes seeking advice from a good business management consultant can also help in taking a wise decision. The review gives you a clear idea of how much the structure of the company must change to get to your goal of going public. Take your time at the start and the rest will come a little easier.

Author Bio:

I am working as a consultant for finance and education in one of the firms in Canada. I am largely dedicated in giving expert analysis and advisory in education, finance, bankruptcy and credits to individuals, students, entrepreneurs as well as firms and organizations. I do more research on various courses, accredited colleges and educational institutions so that I get in depth knowledge about latest trends in education. Follow me in twitter.