CFO’s Role in an IPO
Disruption means opportunity.
That’s been proven true throughout human history, and the current world health crisis is no exception.
There will be winners and losers as the economy adjusts to the “new normal,” and many people are figuring out their place in a radically changed economy. Displaced workers looking for more control over their future, entrepreneurs with vision and sharp-eyed businesspeople are all looking for opportunities that match their skills and experience.
Some will become the next generation of business giants—and it’s impossible to know today which new enterprise will be the runaway success story that will be taught in Business 101 a decade from now.
Will it be you?
If you’ve figured out a way to grow a successful business that meets a growing demand, and you’re ready to take a leading role in your market, congratulations! The next step may be to go public—and that may be the most significant milestone in your company’s history.
The IPO is a complex legal and financial process.
Like all major undertakings, success depends heavily on initial circumstances. Preparations at the beginning will pay major dividends at the conclusion of the transition, and the right support team makes all the difference.
The Chief Financial Officer is at the center of the public offering. The CFO’s role is to lead and guide the financial team, provide the required reporting and fiduciary support to the legal team, and keep the CEO and board fully informed about the status and progress of the process while meeting all the critical deadlines that will arise.
This can be quite a challenge for an enterprise that has always taken a nimble, lean and independent approach to running their business. Many successful private enterprises don’t really pay much attention to the financial side of the business as long as revenue exceeds expenses. Going public changes all that, and very quickly.
Starting the process with insufficient resources—human and capital—dedicated to the financial side of the process is a common mistake that large and small businesses both often make.
That’s a mistake that can delay the process, interfere with accurate valuation, disrupt continuing operations, or even jeopardize the success of the whole effort.
How do you succeed despite limited resources and a tight budget?
Successful businesspeople quickly learn to rely on their teams, delegate responsibility and turn to experts and mentors to quickly ramp up their capabilities. They acquire best-in-class talent and resources for those areas that need the most support, and outsource strategically, if necessary.
This strategy fits perfectly with the demands of an IPO as well.
Whether you want to outsource the project of going public, or your goal is to avoid interrupting regular business operations during the transition, your in-house financial team needs this kind of technical accounting support.
We can either support day-to-day operations while the company handles the IPO or manage the IPO process while the internal team continues doing what they do best. Each approach has advantages and disadvantages that must be considered in choosing the path that’s right for you.
The CFO Squad is ready to help. We have managed many successful IPOs for all kinds of businesses.
Are you considering going public?
Want to pick our brains? Whether you’re just testing the waters or have already started the process and need help, talk to us. We’d love to help you succeed.