Investment Banking, 3rd Edition

CHAPTER 9The IPO Process

As with an M&A sell-side process, an IPO is intense and time-consuming with high stakes for the company and its stakeholders. The typical process spans several months, although IPO-readiness activities and preparation may begin years in advance. Once the IPO decision has been made, the company chooses its team of investment banks, lawyers, accountants, and other key advisors. Internally, the company also identifies its own team who will work with the external parties on delivering a successful outcome.

As outlined in Exhibit 9.1, the IPO process consists of multiple stages and discrete milestones within each of these stages. There are numerous variations within this structure that allow the bookrunners to customize, as appropriate, for a given situation. The Organization and Preparation stage sets the foundation for all the work that follows. In the event the company has long-standing banking relationships and current public audited financials (e.g., a public bond issuer), the prep stage can move relatively quickly. On the other end of the spectrum, some companies may spend months or even years preparing their organization for an IPO. This extends to putting in place the right management and internal support, as well as getting the financials “IPO-ready”.

Formal kick-off begins with an organizational meeting (“org meeting”) where the company, lead banks, their respective counsels, and accountants meet in person. The left lead bank typically runs the ...