The IPO Team Goes to Work

As a member of the IPO team, you will have some jobs to do, just like all the other members of the team. Your main responsibility will be to be sure the company looks good to investors. Some of the most important things investors look for are:

• A well-defined company structure
• Strong employment contracts for top executives
• Audited financial statements for the past three years
• Intellectual property protected by patents and trademarks
• Cash flow projections for the next 2-3 years

While you are busy getting the company ready for public scrutiny, your investment banker is also going to be busy figuring out the proper price for the shares of stock you are going to sell in the IPO. To set the price on the shares, the investment bank will look closely at many factors, including:

• The general financial condition of the company — if your company has low amounts of debt, high profit margins, and a record of increasing sales, the shares will bring a greater price.
• General market conditions — when investors are feeling positive about the market, they are more willing to pay higher prices for shares of stock.
• The effect of supply and demand — when demand is high for your company’s product or services, investors are likely to believe the shares are worth more.

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