Fenwick corporate partner Ran Ben-Tzur recently led a small group discussion, “How can GCs identify, prepare for, and respond to pitfalls on the road to IPO?” at TechGC’s IPO Conference held in San Francisco. Below are some key takeaways gleaned from the conversation, which included insights from in-house counsel at late-stage private technology and life sciences companies.
How are GCs navigating IPO preparation in an environment where companies aren’t going public and where there may be more pressing internal priorities?
Ran: There are certain things that a company is ‘required’ to do prior to an IPO, such as having two years of PCAOB (Public Company Accounting Oversight Board) compliant financial statements and having a majority independent board and independent board committees. However, there are many equally important things that a company does to get ‘public ready’ that, although not strictly required by the rules, are important to focus on regardless of if the company decides to go public.
These include establishing governance structures, implementing systems and tools to ensure quick and accurate financial reporting, ensuring that the company’s capitalization is accurate and building a strong compliance program, among other things. Accordingly, despite the current IPO market downturn, many executive teams, including GCs, are continuing to spend time focusing on public readiness initiatives.