Ms. Buyer outlines the following tips (I'm paraphrasing):
- Make sure the company will meet street estimates for financial results the first quarter after going public. Missing estimates the first quarter after the IPO will "clobber" the stock price. I completely agree with this. When I was a banker, we would make sure the company had strong visibility into the first two quarters post-IPO. Missing earning estimates the first quarter or two after IPO makes the market nervous about the ability of management to meet expectations going forward.
- The audit must be completed before the IPO. One of the first things our team did as bankers on IPOs was to get the accountants involved. Reviewing and addressing any issues that arise during the audit are critical, and making sure the company is SOX compliant is a must before filing for the IPO.
- Don't overreach in your filings. Posting overly aggressive margins in filings will come back to bite you (see note 1).
- Assuming you're choosing from a pool of top investment banking firms, choose the team over the firm. I completely agree with this as well. Among the leading firms, focus on the team.
- Address skeletons in the closet. The point made here is important. In today's world of social networks and free-flowing information, make sure that the executive team has a pristine public profile.
All in all, I feel this is a very helpful article for any company considering an IPO.