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Posted on 27th Oct 2021
Launching your company to the public for the first time can be an exciting and rewarding endeavor to help grow your business and increase your profits. However, it can lead to costly delays and undue frustration for such an auspicious occasion unless it is initiated correctly.
Therefore, once you have done the homework and determined that going public is the right choice for your company, next, create an IPO checklist to help you prepare and manage the IPO process for success, which should include the following steps:
Before you begin, you will need to hire the right team of experienced professionals that can help pinpoint any deficiencies in your internal controls that can prevent you from meeting SEC compliance and regulation during the review.
Some experienced professionals required to launch your IPO include:
You should also be prepared to discuss all disclosures with them as well as the public.
As part of the IPO process, said persons of your team will also need to conduct an in-depth audit of your entire company to ensure reasonable steps were taken to meet legal requirements, also known as the due diligence process.
Some corporate documents that will be reviewed and used for reporting include all legal, financial, tax, and IP details, as well as market research and verification of customers, which demonstrate your operations' probability of success and support all claims made in the registration statement.
Once the due diligence process is complete, the information will then be used to craft the IPO prospectus and other IPO documents required to be filed with the SEC as part of the IPO registration statement. Your company must also provide full disclosure of all potential risks to investors.
Before you can complete an application listing with the SEC exchange, you will need to submit a complete registration statement along with your IPO prospectus for a 30-day review process.
A few weeks before the initial public offering, the investment banker will work on the company's behalf to market various potential IPO investors with the opportunity to purchase shares before they are offered to the public in an effort to generate interest in the stock and increase its sales price.
They will also market to private investors, such as hedge funds, that are willing to purchase the shares in bulk and usually at a discounted price. The bankers will use the sales activity during these events to set an initial price per share.
The IPO will then close, the previously purchased shares will be distributed to investors, and the remaining will be made available to the public.
If you're new to IPO stocks, according to Money Morning, the best way to get started is to "read the latest news and expert analysis of recent and upcoming IPOs to make an informed decision...and learn how to buy IPO stock," which will give you the first opportunity to own shares of a new and upcoming company and put you ahead of your peers.
