“All Hands” on Deck!

An “all hands meeting” is when the whole IPO team gets together to plan the timing and details of the IPO process. In most cases, the goal will be to complete the IPO within three or four months. This reduces the chance of some unexpected negative event in the market disrupting the IPO.

Once the team is assembled and everyone has agreed that now is the right time for the IPO, many things will happen.

• The lawyers and others on the IPO team will have a series of meetings in which they will draft the registration statement that must be sent to the Securities and Exchange Commission (SEC).
• The IPO team will also draft a prospectus, which is a compilation of the basic information and financial data on the company, including any possible “risk factors” an investor might need to know about.
• Once the SEC is satisfied with the prospectus, it will be printed. Then, the investment bankers will begin distributing copies to potential investors.
• The IPO team will put together a “road show,” which is basically a road trip where the company’s senior management and the investment bankers go around and meet with potential investors to explain the company’s business objective and answer questions about the IPO.

Once the SEC notifies the company that the registration statement has been accepted, the company may begin selling stock. At this time, the company and its underwriters will agree on a price for the stock and the number of shares that will be offered. This usually happens the day before the public offering.

The next day, the stock is listed on the stock exchange and the official trading begins. Depending on how investors react at this point, the price of the stock can go down, stay the same, or even rise. With highly successful IPOs, the stock price often rises rapidly. And that is the ultimate dream of every entrepreneur who takes a company public!