How can you manage risks when taking your company public?

Before going public, it is crucial to thoroughly prepare your pitch and rationale for the IPO. For example, you should be able to state, "I am a leader in this business model within a specific market. I need to raise $200 million through a public offering to expand into adjacent markets, which will allow me to double in size over three years, increase dividends, and achieve other goals." This message must be clearly articulated to sell yourself first to analysts at major banks who will underwrite your IPO, then to institutional investors, and finally to the market.

There are 4 simple steps by which a company can manage risks before going public. 1. Conduct extensive due diligence on financials & operations. 2. Get in touch with experienced legal & financial advisors to navigate complex regulatory requirements. 3. Develop a robust risk management plan, addressing market volatility, shareholder expectations, & compliance challenges. 4. Maintain transparent communication with stakeholders to mitigate uncertainties & build investor confidence. For reference, during Facebook's IPO in 2012, the company faced scrutiny over revenue projections, forcing underwriters to buy back shares to support the price. This highlights the importance of thorough risk assessment before a successful public offering.

Planejamento adequado: Antes de iniciar o processo de abertura de capital, é essencial realizar um planejamento detalhado. Isso inclui a avaliação dos riscos envolvidos, identificação de potenciais obstáculos e desenvolvimento de estratégias para mitigar esses riscos.

Faire le bon choix, c’est opter pour des partenaires qui comprennent intimement les nuances de votre marché et les spécificités de votre secteur. Cherchez des collaborateurs non seulement compétents mais aussi alignés avec la vision et les valeurs de votre entreprise. Cela signifie qu'ils doivent non seulement parler votre langue en termes de connaissances sectorielles, mais aussi partager votre engagement envers la réussite de l'opération.

If your IPO is managed by a Tier 1 bank, such as Goldman Sachs or another reputable firm, it will attract more interest from investors compared to an IPO managed by a Tier 2 or, especially, a Tier 3 bank. The reputation and network of a top-tier bank bring credibility and visibility to the offering, making it more appealing to potential investors. It’s a significant plus if your partners are willing to invest their own money, which happens quite often. This instills confidence in market investors observing the process, as it demonstrates a strong belief in the company's potential. Additionally, top-tier banks often provide better advisory services, stronger underwriting capabilities, and a higher level of investor confidence.

Escolha de assessor: Um banco de investimento desempenha um papel fundamental no IPO, fornecendo orientação especializada e suporte ao longo do processo.

Conduct thorough due diligence to identify and assess potential risks in the company's operations, financials, legal matters, and regulatory compliance. Identify key risks associated with the IPO process, such as market conditions, regulatory changes, and competition, and develop mitigation strategies to address them.

Condução adequada do processo: Durante o IPO, é essencial seguir as regulamentações e práticas recomendadas para garantir a transparência e o cumprimento das normas. Um banco de investimento experiente ajudará a conduzir o processo de forma adequada, assegurando a conformidade regulatória e evitando riscos legais.

Definição de uma estrutura sólida de governança: Uma governança corporativa robusta é fundamental para o sucesso de uma empresa de capital aberto. Isso inclui a definição de políticas e procedimentos claros, estabelecimento de comitês de auditoria e remuneração, e garantia de uma cultura corporativa que valorize a transparência e a prestação de contas.

To ensure a successful IPO, you must provide investors with an upside potential and avoid overpricing. If you believe a fair price is $15 per share, don’t try to price it at $20 or $25. This approach leads nowhere because, even if the IPO succeeds, those forced to buy at the high price will likely sell right after. With an inflated initial price, there won't be enough new buyers, causing the stock price to drop. It's better to offer a slight discount, creating an oversubscription where $2 billion worth of investors bid for a $200 million offering. This way, demand will not be satisfied, and those who didn’t get enough shares will buy them from the market, driving the stock price up.

Maintain strong financial stability and transparency to instill confidence in investors and stakeholders. Communicate transparently with stakeholders, including investors, employees, and regulators, to manage expectations and address concerns proactively

Votre histoire doit captiver l'audience, soulignant la valeur unique, la vision, et le potentiel de croissance de votre entreprise. Utilisez des données tangibles, des projections réalistes, et des études de cas pour appuyer votre récit. Votre objectif est de faire comprendre aux investisseurs pourquoi votre entreprise est un investissement incontournable.

Gerenciamento contínuo de riscos: O gerenciamento de riscos não termina após a conclusão bem-sucedida do IPO. É crucial implementar mecanismos de monitoramento contínuo e avaliação de riscos para garantir que a empresa esteja preparada para enfrentar desafios futuros. Um banco de investimento pode fornecer recursos e expertise para auxiliar nesse monitoramento contínuo de riscos.

The company needs to get ready for an IPO. It makes sense to go public when the company is mature enough. This involves various indicators. Firstly, financials – the company should ideally be profitable with substantial revenue, typically at least $500 million if we're talking about the U.S. based stock exchanges. Secondly, a diverse group of shareholders, including VCs, should be in place. Thirdly, organizational factors such as corporate governance rules and reputation management should demonstrate forward-looking shareholders who are not eager to exit the company. Finally, the company and its industry should be poised for significant growth, whether through new technologies, substantial sector growth potential, or other factors.

Something else to consider is Legal and Regulatory Compliance. Ensure compliance with all regulatory requirements, including financial reporting standards, securities laws, and governance practices to avoid legal risks.