Planning to Conduct an IPO? Read this First!

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Is an IPO the best way to realize the vision of your business? If so, you should go ahead and conduct one, but make sure that you plan at least three years In advance. Know why? Investors may have their share, but you will still be the one in control. And if you do not do this? Well, you may earn a revenue, but your business might not operate the way you it want to.  Not what you want, right?

We interviewed the CEO of a company who conducted an IPO on the 15th of April this year.  For this day, the company started its planning in April 2011, exactly three years ago. At the end of last year, the company earned $2 million in sale and their IPO resulted in a valuation of $423 million.

The CEO told us that their products, which were all related to LED lighting, were designed for energy efficiency, particularly suitable for the high-end construction market. He said that in 2013, sales were strong but their prices had fallen. He went on to add, that four years back they had a staff of only 30 people, and now it had increased to 250 at a rate of 78% per year. Considering all these facts, the CEO decided that an IPO would be perfect for them and would give them the chance to attain their vision and make their presence in the market stronger than ever before.

As we talked to the CEO, we learned that planning for an IPO ahead of time was necessary so that day-to-day operations of your business are not disturbed.   And we also discussed some of the things which should be on your to-do list and ticked off before the IPO takes place.

  • Set up formal financial processes and make sure none of these contain any sort of errors. Spend some time on the details, and as you do it, keep track of your financial performance.
  • Employ a professional who has previously been involved with these sorts of financial processes. Try to find someone with experience at a company that has already gone public.
  • Establish a strong board of directors that includes leaders in your industry.
  • Form a trained and motivated executive team.
  • Develop a proper strategy and then start working on the IPO itself.


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