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Benjamin Franklin is credited with the old saying “By not preparing for failure, you are preparing to fail.” As private companies begin their IPO process, it is an extremely crucial time and requires a meticulous and strategic preparation to be successful.

This complex and regulated procedure can be overwhelming for any team. The IPO process involves multiple partners, including investment bankers, underwriters and investors. It is critical to present an unambiguous and well-written equity story that addresses market expectations and offers potential investors with an opportunity to align themselves with your business’s expansion plan.

One of the first steps in IPO preparation is to conduct an IPO readiness assessment, which will consider what a business needs to appear like once it is publicly traded. This allows teams to identify any deficiencies that need to be addressed prior to the IPO date. Most venture-backed firms do not have financial reports that meet the standards of compliance with public companies. A IPO readiness assessment will highlight this issue, and assist the legal and finance teams rectify the issue before the IPO process starts.

Once the initial prep work is completed and you’re ready to start prepping for regular regulatory disclosure reporting. This involves obtaining access to the Securities and Exchange Commission’s (SEC) EDGAR filing system. It’s also necessary to establish an internal working group within the IPO team to work with your external law firm to create EDGAR and iXBRL example documents. This includes a person who is responsible for uploading exhibits into the SEC and coordination with financial printers and SEC files.