Is your company ready to go public?
Some of the factors you need to consider to assess your preparedness to go public include:
Strong management team
Investors will view their investment as a statement of faith in the individuals who lead the company.
Your management team must be able to show that it has:
- the skills and experience to run and grow the business;
- integrity and financial probity;
- clear roles defined, with an identifiable leader who provides strong, proactive leadership;
- an experienced and capable finance director;
- passion for the business;
- sufficient strength in order to run the company independently, not relying on individuals; and
- strong industry and investor contacts.
Management teams that do not have all of these attributes often appoint additional part-time or non-executive directors to fill any gaps.
Clear business model
Potential investors need to understand:
- your company’s growth prospects; and
- the resources required to achieve them.
In developing your company’s business plan, some of the questions to ask are:
- What are your company’s business activities?
- What are the key factors behind its success?
- What is the company’s competitive environment and positioning?
- What is the strategy for growth?
- What financial success and/or prospects does the business have and how does your business compare to your competitors?
To help your company develop long-term relationships with the professional investor community, it will have to demonstrate good corporate governance practices. In the widest sense this spans:
- board efficiency;
- investor communications; and
Investors will expect listed companies to be managed in a way that will minimise any potential conflict of interest between directors and shareholders.
Under EU regulation, companies on regulated markets are required to provide a statement on corporate governance. Check the EU regulation on Transparency Shareholders’ rights, Non-executive Directors and Remuneration policies.
However, each Member State has its own corporate governance code or national rules that public companies may be required to comply with.