Mike Bellin, U.S. IPO Services Co-Leader at PwC, talks about shifts in the capital markets and what companies considering an IPO need to understand and do to succeed in the current environment.
1. First things first: How has the IPO landscape changed, particularly during the pandemic?
Bellin: After a slowdown in early 2020, IPOs have surged, demonstrating the resilience of the capital markets.
But the “going public” process has changed. Post-IPO, we’ve seen more limited lock-up periods and shorter times to follow-on secondary sales. And drafting sessions, roadshows and investor meetings have gone virtual.
2. Why now? For companies looking to go public, is now the right time?
Bellin: Each company is unique, but one thing is certain: The investing power and capital available today for businesses with growth potential is unparalleled in history.
A combination of favorable interest rates, positive economic growth expectations and high investor returns should keep the IPO window open. Also, SPACs typically have two years to find a business to take public, so the clock is ticking through this year and 2022.
3. Here’s how: There are many ways to go public — IPO, SPAC, direct listing, etc. How can companies know which works best for them?
Bellin: Although the goal of being public is the same, companies need to understand the nuances of each journey to going public. Key questions include:
4. More info: How can companies address their readiness? Are there specific areas to evaluate to achieve a successful transition to a public company?
Bellin: The short answer: start early. Management should do a public company readiness assessment well ahead of going public.
Management will need to balance the work of going public with being public and be prepared to meet shareholder and market expectations on day one.
5. The result: What can businesses expect after successfully going public? What are some good outcomes?
Bellin: Ideally, the capital markets continue their current run and investors see substantial returns.
While strong topline revenue growth is important, other areas like proper compliance and a strong controls environment are just as critical.
6. Next steps: What should companies do to protect and grow their business after going public?
Bellin: Challenging as the process can be, the IPO itself is simply a milestone in a company’s life cycle and being public should be the mindset from readiness onward.
Considering an IPO or SPAC to fuel your company's future?
Join PwC on Tuesday, October 26th for their Roadmap to an IPO Webcast to hear first hand from companies and advisors who have recently executed successful public transitions amidst the current market landscape. Learn about the preparations needed to both go public and be a public company, and what your team can do to be prepared when the time is right. Register Here.