An IPO, also known as an initial public offering, is the process a company undertakes when it is making the transition from being a privately held company to that of becoming a public one. An IPO entails the initial offering of company stock to public investors. An IPO is providing a message to the public that a company has reached a level of success. When a company decides to make an IPO it is a venture that enhances its image and credibility by creating a profile and gaining access to potential investors and new capital. The benefits of an IPO, or initial public offering, will provide additional leverage when a company is acquiring new acquisitions and growing through expansion into new markets. The process of preparing for an IPO is quite extensive and complex and entails a high level of expense. Here are some helpful tips and suggestions on how to prepare your company for an IPO, or initial public offering.


Step 1 : 

Realize that during the marketing event of an IPO, or initial public offering, you are making the transition from a private company to a public one and you are promoting your company, its products and services. An IPO is a form of public relations to make your company more visible and to attract stock holders and potential investors. An IPO opens doors for potential business partnerships as well as enhancing relationships with vendors and suppliers.


Step 2 : 

Know that in addition to the positive benefits, there is also a downside to the process of preparing your company for an IPO, or initial public offering. Going from a privately held company to a publicly held company entails a loss of control over financial matters relative to the management of founders and investors.

Step 3 : 

Research the regulations within the region and country where your company is located. Consider that within the United States, for example, that once a company has made the transition to being a public company that the SEC, or Securities and Exchange Commission, requires access to company data. This includes products and contracts, customers, and management information.

Realize that there are also additional constraints to consider if you are a United States business since the passing of the Sarbanes-Oxley Act. Regulations relate to requirements focusing on financial reporting and having to submit to procedural reporting obligations.

Step 4 : 

Evaluate your company's financial reporting systems as you prepare your company for an IPO, or initial public offering. Be aware that Sarbanes-Oxley enforces additional requirements relative to disclosure controls and procedures as they may relate to your company's public filings.

Step 5 : 

Determine which investment bankers you want to provide financial support for as you prepare your company for an IPO, or initial public offering. Do your research and select investment bankers with proven experience as they will be provide you with an evaluation of your company in determining that it is ready to go public.

Step 6 : 

Prepare your company's IPO prospectus. As an example of the process, business owners within the United States will prepare their IPO prospectus to be included as part of the IPO registration statement which is to be filed with the SEC, or Securities and Exchange Commission.

Develop your IPO prospectus to highlight your company's positive attributes and strengths, business capabilities and long-term investment potential. Include an overview of the marketing and promotional efforts that will take place for your company. Within the United States, the public relations aspect of the promotion is often referred to as the "road show."

Step 7 : 

File your official registration statement. Within the United States, businesses will formally file their official registration with the SEC, or Security and Exchange Commission. Include those stock exchanges on which you want to have your company business officially listed.

Step 8 :