Know your story and your numbers, T-3 years
Everyone loves a good story, but investors also love organised accounting and financial records! Three years out from the listing date, you are going to need a bit of both.
You’ll need to start developing your corporate story by asking yourself if your medium to long-term strategy is well defined and articulated and whether your business plan is realistic, sustainable, and resilient to the economic cycles and shocks.
Linked to your corporate story are your financials. You have a strong business - now how can you demonstrate it? You might consider using a combination of budgets and audited financial statements from at least the last three years to show how your business has the capacity to deal with ongoing demands for public reporting and to demonstrate the evolution of your earnings growth.
People & Paperwork, T-2 years
Special people make special businesses. During this period, you’ll need to start thinking about forming your IPO and post IPO team. Consider whether the current board and management have the experience needed to execute the business model, together with the right skills and track record to be part of your public-facing leadership team. If you are going to need to bulk up on people, start thinking about it now. You might also consider whether your board has the level of diversity needed to meet ASX recommendations and a majority of independent Directors. Finally, ask yourself whether you have the appropriate remuneration arrangements for board and management in place for both the short and long term?
Alongside your business-critical people, you need appropriate corporate records. This means having ready access to formal corporate documents such as the constitution, lodgements, and share register. Ask yourself, are all your corporate documents and critical contracts (i.e., customer arrangements, licenses or trademarks) current and fully executed?
The winning team T-1 year
We all could use a little help. No less than a year out from listing, it’s time to form your IPO advisory team. These are your lawyers, investigating accountants, tax adviser, and lead managers. The winning team will help you with all things legal, financial, tax, and investor-related. They will form a committee to guide and help you along the journey of due diligence, prospectus creation, investor origination, and interactions with regulators. Your success will be their success, as you will work with them until you hear that bell ring.
Take off. To infinity and beyond
Listing isn’t the end of the story, only the start of a new one. Once listed, you will have a range of new ongoing obligations to manage. These include periodic disclosure obligations such as your annual report which you are required to send to shareholders. You will also have continuous disclosure obligations which require timely communication of information needed to keep the market informed of events and developments. The Corporations Act also imposes a range of other obligations on listed public companies, which you are unlikely to have had to deal with before. As a result, it’s important you have sufficient internal and external legal support to meet all obligations and most importantly, the right people to call upon when needed.
If you are a founder or business considering an IPO or wondering if you are positioned to go public, the steps outlined above will help get you ready for the journey so you can successfully hit the ground running to achieve your goal and succeed after that bell has rung.