Beyond the POP... Is Your Company Prepared to Go Public?

Recent initial public offerings, including Circle, Chime, Coreweave, Hinge Health, Figma, Firefly, and Heartflow, have captured the attention of private-company C-suite leaders and boards. Moreover, while there is much to unpack across these transactions, the takeaway is clear: the market is open and receptive to high-quality new issuance. Year-to-date, there have been more than 40 IPOs, raising approximately $21B.

Against this backdrop, it seems timely to revisit the case for going public and what it entails. To begin, an IPO is a transformative and major milestone in any company’s lifecycle, providing permanent capital, acquisition currency, credibility, and brand elevation, and an exit for early investors. However, it also demands bold leadership, thorough preparation, and tight alignment among key stakeholders.

Why IPO?

Companies pursue IPOs for various reasons. Articulating a company’s motivations to all stakeholders is vital to a successful IPO.

Key Benefits

• Access to Capital / Investor Liquidity: Provide funding for organic growth & expansion, and an acquisition currency for strategic M&A. Create exit opportunity for early investors.
• Human Capital: Retain and attract top-tier talent with equity incentives.
• Market Credibility: Enhance financial stability and credibility while elevating visibility with key stakeholders.
• Improved Discipline / Accountability: Strengthen financial forecasting, reporting, processes, risk management and corporate governance

Who Makes the Best IPO Candidate and When Is a Company Ready to Go Public?

Key Attributes

• Compelling Equity Story: A scalable business model with a differentiated product or service, market opportunity and/or large addressable market.
• Growth Trajectory: A proven track record of growth with demonstrable key performance indicators & profitability.
• Operational Excellence: Robust forecasting, financial infrastructure, processes, governance, and compliance.
• Competitive Environment: Clear understanding of the potential impact of AI & increased transparency.
• Management Readiness: A team that has been coached and is prepared to thrive in a public market setting.
• Alignment: Unified management, board, and shareholder objectives and goals.

Other Considerations

• Market Conditions: Attractive sector and peer valuations (private & public market valuations/precedent transactions) and favorable economic and geopolitical backdrop.

The IPO Process

A successful IPO is not just about listing—it’s a full-scale transformation involving people, processes, and technology. Successful IPO typically spend eighteen months to two years laying the groundwork for their success. This involves developing effective business processes, recruiting top executive and advisory talent, establishing a robust financial and reporting infrastructure and initial long-term focused investor engagement.

• Planning (2+ Years): Assess IPO readiness, align stakeholders, enlist advisors, and establish governance frameworks. Begin public market investor engagement.
• Readiness (12–18 Months): Build reporting infrastructure, fine-tune business plan, policies, and procedures, consider key performance indicators, prepare financial models and refine forecasting.
• Execution (IPO–12 Months): Select underwriters, consider strategic pre-IPO round of financing, draft registration statements, engage research analysts, conduct TTW, final roadshow & pricing.
• Post-IPO (Ongoing): Manage research analyst community and investor relations, deliver on strategic and financial goals, anticipate changing shareholder base, and evaluate follow-on funding opportunities.

Managing Your IPO for Success

The success of a company, both prior to and following an IPO, largely depends on assembling a talented management team, creating a strong financial and business infrastructure, ensuring effective corporate governance, and designing an investor relations strategy that draws in the right investors. Key strategies include:

• Preparation: Begin operating like a public company well before the IPO.
• Flexibility: Maintain optionality for other funding paths (e.g., Private Markets / M&A).
• Realistic Expectations: Avoid chasing hot markets or overemphasizing initial valuations.
• Execution: Build a strong team, streamline financial processes, and communicate clearly with stakeholders.
• Investor Engagement: Connect with long-term, fundamental public market investors well in advance of an IPO to inform go/no-go decision, assist with optimal positioning and valuation, and identify anchor orders.

Conclusion

In summary, while the current market climate presents a compelling opportunity for companies considering an IPO, success hinges on careful strategic planning, thorough preparation, early investor engagement and disciplined execution. Companies must evaluate their readiness, articulate a clear growth narrative, and build the necessary infrastructure to thrive as a public entity. When approached thoughtfully and with the right strategic partners, going public can unlock significant value—fueling growth, enhancing credibility, and providing liquidity. However, it requires unwavering focus, strong leadership, and a commitment to transparency to navigate the complexities of the public markets effectively. Ultimately, a well-executed IPO can serve as a transformative milestone, positioning a company for sustained success in an increasingly competitive landscape.