IPO readiness is the key to a successful public offering
Going public is a milestone in the life of your company. As exciting as it is, it is a complicated process with lots of room for error—and it is not cheap.
While it is difficult to estimate the costs with precision ahead of time, a PwC publication, Considering an IPO? The costs of going and being public may surprise you, found that "87% of CFOs [surveyed] indicated that their firms spent more than $1 million on one-time costs associated with their IPOs."
Despite the obvious challenges when approaching an IPO, it’s crucial to stay confident. The last thing you want to worry about is introducing unwarranted risk and guessing if your data sources correct.
Do the work on the front end to make sure your company is IPO-ready by getting your house in order well in advance of filing your S-1. Start thinking and acting like a public company by making ongoing progress toward accurate financial and accounting processes. Prove data expertise to give your company its best shot at a successful filing.
IPO-readiness consulting firm Armanino Group cites that best-in-class organizations take 12–24 months to ramp up and put the right people, systems, and processes in place. 12–18 months prior to IPO, the firm recommends adopting the following:
- Timely budget preparation and review processes
- Close processes
- Quarterly financial reporting and historical audits
The table below shows the key characteristics and timeline of IPO readiness, which we like to call “getting your house in order.”
Put these processes in place before starting your IPO process, so you and your team are prepared. Make this work easier on your team by leveraging technology that will simplify these processes, reduce the chance of error, and save your company time and money.
Wdesk, the Workiva software platform, is unique because it allows companies to streamline documentation and reporting processes, and also delivers a complete S-1 solution. The cloud-based platform is engineered to give you and your advisors more time to focus on your company's story and presentation by reducing the amount of time you spend administering changes, worrying about version control, footing, and ticking and tying number changes.
Wdesk achieves these process improvements through a variety of features, six of which are listed here:
- Single source of the truth: While developing reports, live-linked data in text, tables, and charts update instantly and automatically ensure your data is consistent, even when there are late-breaking changes. When significant changes arise (e.g., a number change that impacts multiple document sections), less time is consumed making manual updates across the document.
- Permissions: As the drafting process progresses toward the initial filing and the team of stakeholders grows, Wdesk allows you to add users and assign role-based permissions as needed. An extensive and automatic audit trail is maintained for all activity, so the team has a clear history of all changes, who made them, and when.
- Review: The working group can simultaneously collaborate in the same master document at the same time. Section owners can make updates, which can be accepted by document owner or applied immediately based on the level of permissions granted. Editors can easily and quickly generate blacklines to see any changes between revisions.
- Reconciling revisions: Legal teams no longer need to make handwritten comments on paper that are manually compiled before being submitted. Real-time threaded comments live in each document and can be directed to specific team members for comment. Underwriter style guides are available to update the format of the S-1 at anytime from anywhere. Issuer's counsel can focus on the content of the document rather than accumulating and entering feedback and changes.
- Output: When it comes time to file and print, Wdesk produces critical output files such as HTML, print-ready PDF, Word®, Excel®, and XBRL. instantly view documents in EDGAR without waiting for the printer to translate and code the file. If a company needs to update financials with the next quarter's numbers for a new filing, all linked data is updated throughout the entire S-1, saving the accounting team and auditors hours populating and proofing hundreds of pages with financial data points.
- Leverage S-1 work for future filings: Looking beyond the IPO, Workiva offers a complete conversion of the S-1 into 10-Q and 10-K documents within Wdesk. Initial setup and linking of Q and K documents based on final S-1, full XBRL detail tagging, and two full-service XBRL roll forwards is included.
With Wdesk, you are always in control of your document and the process—utilizing a third-party word processor and printer is no longer necessary to complete an IPO.
It's clear that Wdesk is the future of IPOs. We estimate Wdesk saved us more than half a million dollars preparing our initial public offering document and amendments.
—Richard Chin, CEO, Kindred Biosciences, Inc.
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About the Author
As vice president of corporate development and investor relations, Mike Rost is a key contributor to the organization's growth with a focus on corporate development initiatives, emerging business areas, and developing relationships with investors and key stakeholders. Since joining Workiva in 2015, he has served in various leadership roles helping to drive the organization's growth, including the scaling of Workiva’s marketing and partner & alliance functions.
With more than 25 years of experience assisting organizations to optimize business processes, Mike has an extensive background in finance, accounting, enterprise performance management and Governance, Risk and Compliance (GRC) technology. Prior to Workiva, Mike served as vice president of marketing at Metricstream and vice president of strategic marketing at Thomson Reuters. Prior to that, he spent more than a decade in product management and marketing positions for SaaS companies and held finance positions at Pillsbury and Rollerblade, Inc.
Mike has been active in industry associations, including the Open Compliance and Ethics Group (OCEG) and the Institute of Internal Auditors (IIA). He was also a founding member of XBRL International (eXtensible Business Reporting Language), the global not for profit consortium for open international standards for digital business reporting. He has also been a frequent speaker at industry conferences on subjects such as finance transformation, data and reporting, and risk and compliance technology. He received his Bachelor of Science in Economics and his MBA from the University of Minnesota.