IPO management is the process of preparing a company for an initial public offering (IPO) of its stock. Managing an IPO begins with business owners deciding to go public by offering shares of company stock for sale. Once the decision to go public is made, the arduous process of preparing and managing an IPO begins.
Important characteristics of all IPO offerings focus on the condition of the business before making the decision to go public. The company must be stable and profitable, and able to handle the long-term pressure of an initial public offering of stock. The IPO management team must be prepared to work for one to two years or longer on IPO filings. It is also helpful for the business to be on the rise, because this creates a more attractive package to sell to investors choosing an IPO. Drawing a sellable picture of the company is vital to successful IPO management.
Managing an IPO requires a staff of professionals with experience in the business, finance, and legal fields. Choosing a knowledgeable and well-qualified team is vital because of the complexity of an initial public offering. Most IPO management teams include accountants, business executives, finance and legal specialists, and an IPO underwriter.
Duties of the IPO management team involve a vast amount of preparatory work, which includes research and due diligence. IPO filings require a prospectus detailing plans for the future, including proposed responsibilities of the offering company and potential shareholders. The group managing an IPO develops the plan for staffing and production during an initial public offering. Marketing also plays a major role in IPO listings.
Strategic planning and smart marketing creates a healthy environment for IPO filings. Financial decisions such as the stock price per share and number of shares to make available can mean success or failure for an initial public offering. Managing an IPO includes introducing the company’s CEO and selling the philosophy of the company to investors watching IPOs. Successful IPO offerings include an IPO marketing campaign designed to sell the company, its executives, and its products to potential investors.
When the plan is established, the IPO management group must implement the strategy, stay on schedule, and prepare the company for the initial public offering. The IPO underwriter typically comes on board at this stage. The underwriter provides financing for IPO offerings, so an experienced negotiator can help seal the best deal.
A company’s relationship with its IPO underwriter can greatly influence the success of the initial public offering. Choosing an IPO underwriter that is the best fit for the company is vital. Long-term commitment should be apparent, and transparent communication helps the process flourish without serious problems.