The IPO felt to me much like starting my first startup. I had a lot of questions and had no clue if what I was doing is the right thing; What should I be doing? Am I on the right path? There was no guide, no book that states the steps. No rules I should follow.
The IPO is the same. We got into the process, expecting others, investment bankers and lawyers, to explain to us what this means, how a great process looks, where the pitfalls are, and how we should think about it. Instead, through their eyes, we got their perspective – which makes sense but left us feeling many times in the dark. It didn’t help that so many in the process have less than positive remarks about other players. We had many uncertainties up to the very end.
In hindsight, I can say the IPO was a transformative process for us. We learned a lot about how to convey our vision and think long-term and changed a lot of core things we do to support being public, but we still maintain transparency and work like we love to.
This series of IPO episodes and blog posts is our attempt to create a guide to others who are planning to take their company public.
We tried to build the guide we wished we’d had before we started. I think this guide is relevant for both management teams and employees of companies in the process.
Bear in mind that these things change a lot and that we will share from our experience, but time and different industries may change the dynamics of the process altogether. What will probably stay the same are the players and much of the technicalities of the process.
The steps of the IPO process are an essential part – this is why I decided to begin with them.
Each step here is a long, meaningful one, and it’s important you’ll know them:
Bank selection – The process of picking your lead bank/s.
Org meeting – The IPO process kicks off with all the players: two law firms, the banks, and the accountants. This is where they learn about the company, and we had a lot to prepare for this day.
Writing F1/S1 – Writing the prospectus – about 200 pages that define your offering. It’s an important document, and you’ll spend hours on end working with 40 different people in the same room (or Zoom call) to get it right.
TTW – Testing the waters (ttw1, ttw2) is a meeting with investors that will set the tone for your future relationship with them and help bankers gauge interest.
Syndicate – The stage you pick the other banks that will accompany you in the process and define their compensation model.
Analyst day – When all the analysts that cover your company get to hear you explain in your own words about the company. At this point, your deck is battel tested from the TTW, but here more depth is needed. This is an important stage as those analysts will cover the company post the IPO.
Roadshow – Two weeks of meeting more investors. This time a price range was already set for your shares, and you start seeing orders get in every day – the roadshow is the process of getting actual orders to build the book.
Pricing and closing the book – Deciding which investor gets how much, and deciding on the share price the company will IPO at.
IPO Day – When the stock starts trading.