"When considering an approach to the public market, there is so much work to do at so many levels-from equity awards and compensation plan design to tax planning, from liquidity and trading strategies to planning for "business as usual" before and after a transition. Whether your company is three months, three years, or three decades into its strategy, the question is: Where are you in your trajectory-and are you heading in the right direction?"
"As you weigh the timing and choices for your company, focus on key goals and consider what your company would look like in the public market. Map out all the pros and cons of a transition. For example, an IPO can potentially provide significant capital infusion while offering liquidity options for early investors, equity holders and employees. However, an IPO also means companies must be ready to navigate complex regulatory requirements and increased scrutiny from investors and analysts, which can be both time-consuming and costly."
Private companies face extensive preparation when moving toward public markets, including equity awards, compensation plan design, tax planning, liquidity and trading strategies, and operational continuity before and after transition. The private market continues to grow across venture capital, private credit, real estate, infrastructure and private-company equity, with assets under management rising roughly 20% annually since 2018. Many later-stage private companies delay IPOs despite fluctuating global IPO volume. Decision factors include capital infusion and employee liquidity available through an IPO versus regulatory complexity, investor scrutiny, cost, and the greater strategic freedom of remaining private. Market timing for an IPO cannot be precisely predicted.
Read at Fast Company
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