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How to Prepare for a Successful IPO

The 2022 Initial Public Offering (IPO) market had a tepid start compared to 2021. This occurred amid a rapidly changing geopolitical landscape and skyrocketing inflation. Uncertainty has both increased market volatility and developed challenges for new issues.

Deciding to go public is a formative step in any company’s growth. However, it can also present major challenges. While market conditions influence whether it is a prudent time to float, other core elements need to be considered.

To aid you in how to prepare for an IPO, we have created a checklist of major considerations that an organization might want to complete or think about before going ahead with an IPO, Direct Listing (DL) or Special Purpose Acquisition Corporation (SPAC).

Introduction to Initial Public Offerings

The term IPO has been a buzzword for decades among investors and those who work on Wall Street. However, the first modern IPO goes back much further in history. The Dutch East India Company is credited with this, by way of offering shares of the company to residents of the Netherlands.

Meanwhile, the roots of the New York Stock Exchange (NYSE) reach as far back as 1792, with the first American IPOs including the First Bank of the United States and the Bank of New York.

On average, since 1983, there have been 379 IPOs every year, with as many as 958 in 2021 and as few as 53 in 2008. Going public remains a goal for many companies, irrespective of market conditions.

How Does an IPO Work?

Setting up and executing an initial public offering is a resource and time intensive process. Often, depending on the jurisdiction in which the organization wishes to list its shares, there are regulatory requirements and restrictions.

For instance, in the US, Securities and Exchange Commission (SEC) lays down the regulations and rules that determine a company’s eligibility to be publicly traded.

Essentially, the IPO process consists of two parts:

  • The pre-marketing phase of the IPO

  • The IPO itself

A company that is interested in an IPO will advertise to underwriters or make a public statement to create interest.

Underwriters are chosen by the company and will lead the IPO process. The company may choose one or more underwriters to collaboratively manage different parts of the IPO process. From due diligence to filing to issuance, the underwriters are involved in every aspect.

Measuring a Successful IPO

Before one learns how to prepare for an IPO, one must learn what a successful IPO means. Here are some of the ways you can measure an IPO’s success:

  • Capital raised

  • Share price appreciation

  • Branding

  • Valuation

  • Talent

How to Prepare for an IPO: Key Steps

Good general advice is to start as early as possible. Give your company more time than you think it will need. With that, let’s begin.

1. Determine Roles & Responsibilities

You need to identify counsel and auditors as well as determine responsibilities for all matters pertaining to an IPO, such as registration statement, IPO structure, and overview of the organization’s governance framework.

2. Get the Right Support

Your company should begin adopting public limited company (PLC) practices and disciplines before the IPO. This will put the company in a better position post float.

  • Establish PLC-standard board & committee practices. For instance, a proper board calendar, terms of reference, schedule of board matters, and so on.

  • Implement nomination committees, audit remuneration, and other committees.

  • Establish procedures and policies that are relevant to listed companies such as the share dealing code and disclosure procedures.

Since this could feed into the financial review process, you should choose your advisors carefully.

3. Offer Employee Share Schemes

Many organizations want to retain and incentivize their employees prior to the IPO or at the IPO stage.

They do this by offering employee share schemes, which facilitate employee ownership and can help with staff recruitment and retention – and improve performance levels.

4. Choose Financial Printer, Transfer Agent & Registrar

  • Financial printers help privately held companies in registration document filings for the SEC. They also help these companies stay compliant by continuing to perform SEC filings such as warrant forms, stock certificates, and annual reports, once public.

  • Transfer agents issue and cancel certificates to show changes in an entity’s securities’ ownership. They also act as intermediaries for the company.

  • Registrars maintain the register of the issuer for every securities issue.

5. Obtain CIK Confirmation Code (CCC) and Central Index Key (CIK)

Do this on behalf of the company, directors, 10% holders and Section 16 officers.

  • The CCC is an 8-character code used along with the CIK to submit filings through Electronic Data Gathering, Analysis, and Retrieval (EDGAR).

  • The CIK is a unique public number that is used on SEC’s computer systems to identify corporations and individuals who have filed disclosure.

6. Post IPO Steps

Consider anything you may need to do post IPO.

For instance, underwriters might have a time frame to buy more shares after the IPO date. Furthermore, some investors may be subject to quiet periods, which forbids management teams or their marketing agents from expressing opinions about the company’s value.


We hope this article has given you some insight into how to prepare for an IPO successfully. Having said that, the IPO process is tedious, and your accounting team may be overwhelmed. To relieve them of that burden and allow them to remain productive, don’t be afraid to seek help from accounting companies.

To give you the most accurate and fastest reconciliation, we use our patented software CrushErrors, which we specifically created for huge amounts of data that other reconciliation software cannot easily manage. You can also obtain CrushErrors as a product if you’d rather conduct reconciliations in-house.

NextGen Accounting’s management team has decades of experience and includes former executives of Barclays Bank, Bank of America, and ICBC. Contact us today for reconciliation services or book a free demo if you’d like to get CrushErrors!


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