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The road to an IPO

Privately held companies in New Jersey who are considering making the switch to being publicly held often make this leap because of the public funding that would then become available to them. In short, an initial public offering is a capital-raising event and while it can be extremely lucrative it does bring with it some changes and new things that executives need to learn.

As explained by Financial Executives International, the process of going public requires that company management get started at least one year prior to when they believe they will hold their IPO. Among the first things the business should look to do is to get a good executive team in place. Having people in these positions who have had experience at a public company may also be valuable and should be kept in mind when recruiting new personnel.

Also important during the lead-up to an IPO is the monitoring of external communications. This may include everything from press releases to marketing materials. An initial document called an S-1 must be filed with the U.S. Securities and Exchange Commission roughly four to five months before the IPO date.

Eventually company leadership will go on what is called a roadshow where they pitch their company and the stock to investors. According to Forbes, before this roadshow they will conduct a mini version of this called Test the Waters so they can get a better idea of how the public investors differ from private venture capitalists and how very savvy they are when it comes to company financials.




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