Case Study: IPO In-House Training Services Preparing Management Teams for a Successful Public Listing

Background on Case Study IPO In-House

An emerging firm with a competitive and highly-regulated industry was planning the possibility of an Initial Public Offering (IPO) as part of its long-term growth and fund-raising strategy. The organisation was at the phase of operational maturity, its revenue growth was high, it had a growing market presence and more institutional investors were interested in the organisation.

Although the senior management was highly experienced in the running of the business, a high number of team members were not well exposed to the IPO process. The major stakeholders in the finance, operations, legal, compliance, and investor relations had to be familiar with the expectations, responsibilities, and discipline of becoming a publicly listed company.

It was realised by the management that an effective IPO could not be achieved without outside advisors and technical reports. Internal preparedness, cross-functional alignment and understanding of what occurs in IPO related processes were very important. In order to develop internal capacity and organisational readiness, the company enrolled our IPO In-House Training Services.

Issues and Challenges

The organisation had a number of issues that led to the necessity of organisation-based IPO-specific training.

Lack of expertise in the IPO lifecycle was one of the key challenges. Most of the workers did not know the procedures of IPO, such as pre-IPO restructuring, due diligence, preparation of prospectus, regulatory scrutiny, marketing, pricing and post-listing requirements.

Regulatory and compliance expectations were also another challenge. The organisation had to make the important teams aware of listing rules, disclosure requirements, corporate governance standards and continued compliance requirements after listing.

There were also the problems of financial reporting and controls. Although the internal financial reporting was healthy in operations of private companies, the public market demands a greater degree of transparency, consistency, and internal discipline of control.

Internal coordination was also an issue the management was worried about. IPO involves very high cooperation between departments and failure to understand each other may lead to delays, misunderstanding or risk of more execution.

Lastly, the top executives tried to introduce the management teams to life as a publicly-traded company, and how to deal with regulators, analysts, investors, and the board, among other things, and handling market scrutiny and performance pressure.

Objectives

The main focus of the engagement was to develop internal IPO preparedness by customized IPO in-house training.

Particularly, the organisation intended to:

• Acquire a proper interpretation of the IPO process and schedule.
• Create regulatory, governance, and disclosure awareness.
• Enhance internal coordination among work streams of IPOs.
• Get the management ready to handle a company which is publicly traded.
• Minimize execution risk by knowledgeable and coordinated in-house groups.

The training programme should have been practical and non-specialist friendly, as well as have been in line with the IPO strategy and target listing market of the organisation.

How We Helped

Our organised and collaborative system of in-house training of IPO was based on the industry, IPO listing targets, and the level of internal preparedness of the organisation.

We have started with an IPO Readiness and training needs assessment. Our team collaborated with the senior management, finance, legal, compliance and operational teams to learn the intended IPO structure, challenges that should be expected and knowledge gaps within the company.

On this evaluation, we had to come up with specific training packages that incorporated the entire IPO process. Some of the topics covered IPO basics, pre-IPO planning, and corporate restructuring, as well as, roles of key advisors including investment banks, auditors, legal counsel and regulators.

One of the fundamental areas of focus was regulatory and governance requirements. Training covered the rules and disclosures, corporate governance bodies, board duties and post listing compliance requirements.

We have also dealt with financial reporting and internal controls, such as the external company financial statements, audit expectations, internal control framework and the significance of transparent and regular reporting.

There was a heavy focus on the practical application. Training entailed the inclusion of IPO timelines, process maps, role-based discussions, and scenario analysis, to allow the participants to see how their roles were included in the overall IPO execution plan.

The programme was designed in a way that would include the participants across various functions, which included finance, operations, legal, compliance, HR and senior management. This guaranteed generalized knowledge coupled with cross-functional consistency.

The delivery of the training was done as interactive workshops, in-person and virtual where needed. The facilitated discussions enabled the participants to ask questions, share responsibilities and deliberate IPO related challenges specific to the organisation.

As a learning support one of our provisions was reference materials, IPO checklists, process guides, which the participants could consult during the IPO preparation phase.

During the engagement, we collaborated with the internal teams to make the training content relevant, practical and in line with changing IPO plans.

Value Delivered

This case study proves that professional IPO In-House Training Services can make organisations more ready and facilitate an easy shift to a publicly operated status.

The involvement was created through a structured and practical training which assisted in building internal knowledge of the process of the IPO, along with a better coordination of the departments, and also preparing the management teams to the task of dealing in the public markets.

The IPO in-house training model that evolved during this engagement offered an effective scale based on IPO implementation, post-listing governance, and future prosperity as a publicly listed company.