Donna LaVoieDonna LaVoie

Once a company has decided to go public, planning in advance is critical to a successful outcome. Initializing the IPO process signs a company up for months of hard strategizing, messaging and decision-making to effectively bring the company public. With numerous variables such as market dynamics, legal consideration, public and investor relations at play, it can make it difficult to determine how to start and successfully navigate through the process. Assembling a knowledgeable team of lawyers, bankers and communication professionals can help ensure a business will be on the right track and have an expert insight into each discipline.

When the pre-IPO process gets underway, think about preparing an infrastructure to achieve future goals including timeline, strategy, prioritization of audiences and approach and style for communications. Review your press release and corporate disclosure program. Think about news pegs that could go out before the “quiet period” starts. Consider conducting an investor positioning session to discuss and refine the corporate story, develop a peer group from which to benchmark, develop or refine the working investment thesis and set appropriate corporate milestones internally. This strategy will help build a foundation for your IPO by allowing you to assess and build relationships with top funds, develop third-party spokespeople, train corporate spokespeople and develop a process for dealing with inbound inquiries as well as conduct risk assessment and develop crisis prevention plans. Effectively communicating the story is another area that should be considered in preparing the infrastructure for going public. Investor materials such as fact sheets, corporate presentations, management videos, websites and internal and external question and answer documents should be prepared.

Pre-IPO: create your support network

Partnering with the right mix of internal and external resources will provide the framework for a successful process. In addition to the senior leadership team, consisting of CEO and CFO, along with input from regulatory and medical affairs teams, external partners such as an IR/PR firm, legal counsel, accounting and investment bankers, will ensure a well-versed group to collaborate and support a company’s efforts.

One of the important elements of success, from a communications perspective, is the development of the right communications strategy, targeted to the right stakeholders, at the appropriate time. There are many factors to this, including a company’s strategy, products and their stage of development. However, there’s increasing importance in ensuring other key stakeholders such as customers, key opinion leaders/physician groups, as well as patient advocacy groups, are among the constituents that understand the company story. Wall Street has been known to conduct their own market research to find out exactly how third parties such as customers and physicians think they would use a product and how it would fit into the competitive mix. Ultimately, the development of the right program will ensure that a company and its products are valued appropriately.

The IPO process typically lasts 4-6 months, but can vary company to company. There are three key phases in the process: the Preparation Phase (1-4 months), the Registration Phase (2-3 months), and the Marketing Phase (2-3 weeks).

In the preparation phase when drafting the registration statement and selecting an investment bank, along with preparing audited financial statements, it would be important to also develop a communications roadmap. This includes outlining the timeline of milestones and news items, prioritization of audiences, an approach and style for communication and outreach as well as a corporate disclosure program. An IR/PR firm will have the opportunity to ensure that the corporate website is telling the right story to the right audiences. In addition, this is the time to ensure that the company story is getting told to the appropriate media channels and the development of key relationships. Message training development is similar to finishing a package off with a bow. Taking the presentation to 100 percent effectiveness and message training the team will prove to be worth the investment.

In the registration phase, an exchange will need to be chosen, as well as responding to SEC comments and sharing financial projections with analysts. Companies will want to be working with an IR/PR firm on preparing the investor roadshow story, getting the IR section of the website ready and determining peer companies which track from a competitive perspective on valuation, story-telling, institutional ownership and analyst coverage. On the PR side, the development of a publication and medical communications strategy and development of a third-party spokesperson is a good idea.

In the marketing phase, the investment bankers will prepare the salesforce, and the road show begins. IR will play a role in building relationships, attending the luncheons and working with the bankers on the investors with which to meet. The order book develops and pricing and allocations are done.

Post-IPO: plan a communications process

After you complete the three phases and actually go public, you need to think about your post-IPO communication strategies, which is crucial for managing relations with Wall Street. Successful communication is essential when setting up the earnings releases, “non-GAAP” financial information and quarterly conference call schedules and programs.

Working with internal stakeholders to drive milestones forward and set expectations will assist in engaging and building the institutional ownership along with sell-side coverage to provide fair valuation. Scheduling monthly disclosure committee meetings with your internal team is a great way to make sure that upcoming milestones are communicated effectively to external stakeholders.

As a newly public company reporting to the Securities and Exchange Commission, an internal process must be set up for execution of 10-Q and 10-K submissions as well as when 8-K filings are required to be submitted simultaneously with press releases on materially relevant updates.

Attending regular investor conferences, updating the website, considering the social media plan and gathering feedback from conference calls to determine perceptions are all elements to a best practice IR/PR program.

It’s essential that you follow through the three phases of this process, as well as taking time pre- and post-IPO to develop and assess your company.

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Donna L. LaVoie is President and Chief Executive Officer of LaVoieHealthScience.