The Shopify team rings the opening bell at the NYSE on May 21, its first day as a publicly listed company. (Richard Drew/AP)
Bill Demers, partner and Canadian IPO lead at Ernst & Young LLP, shares his tips for getting your company ready for prime time on the public markets:
1. Clean out your closets
“The first thing we do when a company is thinking of an initial public offering (IPO) is to decide if it’s the right strategy. We assess the fundamentals of the business: the size of the market and the growth potential, and also the company’s financial track record and its management team. By going public, you’re taking a company that was once private and pulling the tent off. So if you’re deficient in any way, it’s an issue.”
2. Start timing the market
“The market might seem frothy, but you still need to do the prep work. We suggest having all the preparation nailed down before you plan to file (ideally you should begin a year or two in advance). That way, when the market conditions are right for your particular industry, you can pull the trigger. Companies traditionally prepare themselves to IPO when the market starts heading south a bit, so when it does tick back up again, they’re ready to file.”
3. Spot your opportunity
“Sometimes you’ll see a wave of companies going out into the market because the fundamentals seem right for it. If you have a business that could be a consolidator, that can be an indication you should go public. Investors are always looking for growth stories, and a good, well-managed business will always have a market.”
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