Sunday, November 27, 2011

An IPO in Your Future?


"Facebook Employees Go Nuts as Zuckerberg Tells Them the IPO Is Coming" was the lead story last week in the Tech section of The Huffington Post. And rumors are swirling that the S-1 filing is due as early as next month—that is, if Facebook selects a bank to underwrite the offering.

In the United States the Initial Public Offering (IPO)* market is holding, although many pulled back in Q3 due to cancellation, postponement or in some cases mergers and acquisitions. Today many of these companies are just waiting for better market conditions to get out on the road.

As of Nov. 23, Groupon (GRPN) was experiencing major volatility and the stock price was trading 15% below its initial public offering price of $20. As a result companies like Zynga and Yelp, which were hoping to squeeze through the IPO window, are now rethinking their market debuts.

If there is a possible IPO in your company's future and you're waiting for the IPO market turn-around, take advantage of this time to learn about the process for taking your company public.

How to Begin
Start by assembling an experienced team of investment bankers, attorneys and accountants. Then you'll write a prospectus. And finally, you'll take your roadshow to brokers and institutional investors in designated cities around the world.

Preparation Is Critical
Going public entails making one of the most important series of presentations in your company’s history—one that involves selling your company to a wary public for the first time. You must ensure that your key people are prepared to give a well thought-out, clearly focused, enthusiastic presentation from start to finish every time.

Most management teams are unprepared to tell and sell their company story. They are inexperienced at developing and delivering a succinct presentation outlining the company's investment potential, complete with a winning presentation that must be delivered in 20 to 30 minutes.

Drafting the Roadshow    
Creating text and visuals for a road show begins with a drafting session, and then the story is refined over the course of three to four weeks. The final story must be compelling and easily understood.

Using Effective Visuals  
You must support your company story with graphics that are visually clean, simple and easy-to-understand—which translates to a professionally produced presentation (Powerpoint or KeyNote) that can easily explain a complicated technology or multi-product company.

Delivering the Presentation
Can you synthesize and articulate the most important elements of your company's investment story?

Can you speak energetically and use eye contact?

Are you comfortable in a stand-up presentation?

Does anyone on your team have an accent that could create communication problems?

Do you have carefully crafted answers for that all-important Q&A session?

Go for It!

With coaching your team should deliver a relaxed, informative, crisp and persuasive presentation that will motivate potential investors to invest with you. And remember, a sharp presentation can boost the offering price!

Melissa designs and develops roadshows and coaches management teams that are raising equity in the private and public markets. 

* A company’s first sale of stock to the public. Securities offered in an IPO are often (but not always) those of young, small companies seeking outside equity capital and a public market for their stock.


Parts of this blog first appeared in August 2009 in Communicating Effectively, a column Melissa Monson wrote regularly for the Hong Kong Regulatory Forum online newsletter. 

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