We support management teams on going public to attract investors and to attract better management.
Brilliant ideas demand great execution. Our team have world-class professional backgrounds and we think like investors. We work with clients to develop and communicate clear, compelling investment cases to support their results and other regular capital markets communications and major strategic events. We help clients think through the critical execution and market issues typical in a transaction. We bring a unique perspective to each mandate, shaped by our deep industry knowledge and backgrounds as well as our organization’s experience.
Going public is an option that many businesses start considering after reaching a certain stage in their development, whether to access funding from capital markets and drive their growth strategy, or to offer the opportunity to its private shareholders to obtain liquidity, crystalise the value of their shares and diversify their asset portfolio. But, what factors determine the success of an IPO?
Without a doubt, the chances of success of a company’s IPO largely depend on the appeal of the investment proposal represented by the company, its equity story. In other words, the company has to offer a proposition that’s capable of attracting potential investors.
However, there are other factors that can largely contribute to the success – if properly designed and chosen – or failure of the process. The most significant challenges to ensure the success of the transaction are the following:
1. Defining an attractive ‘equity story’. Identifying and highlighting the company’s strengths and opportunities, as well as the mitigating factors to the risks or threats facing the company’s business model. The idea is to build a convincing narrative that conveys, in the clearest and simplest way possible, the attractive investment proposition embodied by the company.
2. Design an adequate price discovery process, to determine the right price of the shares, i.e. the price at which investors are willing to buy and the issuer to sell the shares. For this, it is important to:
3. Adjusting the offering size and structure to ensure the achievement of the company’s goals and the execution of its business plan. At the same time it is important to provide shares with sufficient liquidity once they start trading in the market.
4. Choosing the right market timing. Deciding on the best window of opportunity taking into account market trends, potential threats, and competing transactions, and of course, the issuer’s own strategy and needs.
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