Close

(704) 728-7232 info@techassure.com

Tag Archive for: IPO

by

Filing for a Public Offering? 5 Tips to Prepare for Public Company Status

A successful Initial Public Offering offers a sense of pride for a firm. Watching your publicly traded company’s symbol flash across the ticker is an elevating experience. But what additional risks does your company face after an IPO?

Changing from a private to public company status will have additional risks that your organization may need to be aware of and it is important to develop a solid risk management strategy that can help your company adapt successfully after an IPO.

Accountability and scrutiny must be taken into account after a company goes public. The amount of exposure involved with an IPO is enormous and senior management must adjust to their new risk profile.

A successful IPO extends your reach from initial investor interest to public stakeholders. Investors and stakeholders must feel confident in your strategic plan and your ability to manage a wide range of risks. In addition, those firms experienced in turning risk into opportunity will be rewarded. Remember your company is now comprised of public as well as private funding and with great power comes great responsibility. Sound strategies for nurturing investor and stakeholder confidence are essential for an IPO’s success.

Here are 5 tips on transitioning your risk management program, as you move from private to public company status.

  1. Start from the top: Your board needs to be in position for successful development of a risk management strategy. Encourage your CFO and your CRO to work in conjunction. Compliance between these positions will successfully build the necessary framework for risk avoidance. This in turn, will set the pace for senior management strategy planning.
  2. Set the stage for effective and robust board governance: Your board governance will need to adapt to your new planning techniques. Since investors are watching more closely, it is time for your board to shine. Make sure you have key players in place that have versatile talents which will enhance rich governance techniques.
  3. No alarms and no surprises: The public market hates surprises. Surprising your investors can cause alarm which will affect confidence. New ideas and strategies should be carefully vetted. This will ensure that new product launches goes smoothly. Make a practice of including risk management in all of your core business unit discussions.
  4. Stay ahead of regulation: Regulations are constantly impacting the market. After an IPO — stay ahead of the curve as much as possible. Keep you investors informed about these changes and share your plans for compliance. This lets investors know your board is effectively keeping your firm on track.
  5. Stop watching everyone else: During the immediate period after an IPO, focus on understanding your unique risk profile and building mitigation strategies to manage the risks. This will provide a solid platform for discussing “risk” with public shareholders.

Adjusting your insurance and risk management program as your firm goes from private to public is important. Contact a TechAssure Association member to learn more about the support they can provide as your build your risk management program.

by

Considering a IPO? Don’t Wait to Adjust Your Directors and Officers Coverage

.

.

As with any business decision, the decision to offer an Initial Public Offering is an important one that should be carefully considered. When done correctly, an IPO can boost to the company and propel it to even greater heights.

The benefits of an IPO are broad:

  • Fresh liquidity
  • Cash infusion
  • Growth in trust for the company

The fresh liquidity and cash infusion go hand in hand. By offering shares of ownership in the company, investors come in to provide cash to help grow operations. In return, they receive a piece of the company and its future profits, and that activity can lead to greater trust from the public. Giving the public a stake in the company means that they also now have a vested interest in the growth of the operation. That is always a benefit.

There are two types of companies that are in the best position to consider an IPO in today’s market. These are companies that are either larger (approximately $500 million in sales per year) or are growing fast. Companies of these types are most likely to grab enough attention from early investors to make an IPO worthwhile.

Our advice is not to wait until filing an IPO to think about your Directors and Officers Liability program. Generally, a D&O liability contract provides security and certainty to directors and officers by providing certain coverages to protect their risks. It is important to know that purchasing some Directors and Officers coverage as a private firm can position you to build a solid D&O program as you transition from being a private company to becoming a public firm. The coverages under a D&O policy are not universal, but establishing a relationship with the insurance underwriters before an IPO can help you develop an innovative program with clearer policy wording and leverage to receive the most favorable premium.

If your firm is seeking more guidance on planning and preparing an IPO, please contact us today. A TechAssure Association member will begin working with you to transition your insurance and risk management program as you move to public company status.