An IPO is one of the biggest milestones in the life cycle of a technology company and represents value for the founders employees, customers, and employees. But it also imposes the company with a new set of rules, regulations and standards that the company may not have adhered to as a private company. The key to success is to be prepared and that starts with a complete IPO preparation checklist.
The first step is to establish a fully functional system that enables the company to keep an impeccable financial record that can stand in the eyes of shareholders and regulators. This is a top priority for the CFO’s team and must be addressed well before the IPO date. This means implementing an automated reconciliation process to eliminate any errors in data, making sure that the company is compliant with IFRS and US GAAP, and setting up committees for board members such as the audit or compensation committee, as well as special finance.
Another crucial aspect is having a strong management team that will be able to execute the growth plans of the company as it transitions to being public. This is typically the most important non-financial element to take into consideration when preparing for an IPO. Investors are looking for a leader team that has demonstrated their capability.
In the end, an IPO readiness assessment should be undertaken by a knowledgeable advisor and/or auditor to determine the condition of internal controls accounting practices, financial controls, and other issues that need to be rectified prior to the IPO can take place. It is recommended to do this early in the IPO process so that any deficiencies are rectified prior to being reported to investors and the SEC.
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