Pre IPO Business Plan

Going public is an event.  A very time-consuming and difficult event….but well worth it when done correctly.  Accessing the public markets can be a windfall for the company and pre-IPO investors as well as other parties involved.  The road to going public, or an IPO as is it often called, is mixed with different parties that help transact the deal.  Included in these parties are investor relations agents, attorneys, accountants, broker dealers and more.  A pre-IPO business plan not only showcases all the parties necessary for an IPO but acts as a road map for the company to understand the steps need for a successful IPO.

The IPO business plan is very similar to regular business plans except that it showcases to potential investors how they may exit their investment after the IPO.  It all outlines all the costs of the IPO to the management team so they can make an informed decision about where to list, what broker dealers to contract, which attorneys would be a good fit and other elements of the Initial Public Offering route.

Somethings to keep in mind when developing a Pre IPO Business Plan include:

  • When are you planning the IPO?  The timeline for an initial public offering is important and should there should be a timeline in your business plan to make sure all team members of the company understand when and what will take place in the coming months.
  • Where are you planning to list the company?  A pre IPO business plan will layout options and give details about where the company is planning to list.  Companies can list on multiple exchanges and a solid business plan will allow the company to understand the ramifications of each exchange.  Common exchanges in the United States include NYSE, NASDAQ, OTC Markets, etc.
  • What type of securities will you be issuing in the IPO?  The business plan should outline which type of security the company will be listing for sale to the public.  Common shares?  Preferred shares?  Bonds?
  • Will there be a firm commitment underwriter?  Or a best efforts underwriter?  Going public means you need a market maker, someone to create a marketplace for your stock when it trades on an exchange.  Upon the filing of an S1 registration statement with the S.E.C., the party going public should state in their business plan whether or not they have a firm commitment underwriter (one who buys the stock upfront) or one who will try to sell the stock after they have gone public.

These are just a few questions to ask yourself and the company before going public.  A solid business plan allows these questions to be answered in a systematic fashion to assure that nothing is left to chance when proceeding with an IPO.  The business plan also allows the company to forecast financials and business projects to prospective investors.  After the business plan is complete, much of the data makes its way into the S1 registration statement for filing with the S.E.C.

Do you need a pre IPO business plan for you company or client?  Contact us today.

We also offer several other business plan types for your specific needs.  If you are in need of a business plan writing service, offered by professionals, Cervitude Business Planning is the one-stop shop for all your business plan needs.  Contact us today.

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