01. IS AN IPO A GOOD IDEA FOR MY COMPANY?

Determining IPO readiness takes time, but according to Brett Paschke, head of equity capital markets at investment banking firm William Blair & Co., there is a checklist of criteria: a strong balance sheet and profitability for at least the last three years, a three-year outlook for double-digit revenue growth and a market capitalization of at least $150 million to appeal to institutional investors.

Beyond those things, “make sure the market conditions are right,” says Alan Sheriff, co-CEO of Solebury Capital, an IPO advisory firm. “If comparable [public] companies are down 20 percent year to date, it may not be the best time to optimize value.”

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02. DO YOU SPECIALIZE IN WHAT WE’RE SELLING?

You want research analysts and sales forces who know your company’s space. Some big investment banks, such as Goldman Sachs, JPMorgan and Credit Suisse, work across many sectors, but most have specialties.

03. HOW BUSY ARE YOU?

The last thing you want is an underwriter stretched across too many deals.

04. SHOULD I GO WITH ONE UNDERWRITER OR SEVERAL?

It’s typical for a business to hire two to five underwriters, with one or two named as lead bookrunners. That helps you tap into complementary strengths.

05. WHO WILL TAKE DAY-TODAY RESPONSIBILITY FOR OUR COMPANY’S IPO?

You’ll be spending a lot of time in conference rooms with your underwriting team, so make sure you like the team members. The last thing you want is for your IPO to head south because you and your underwriters can’t stand each other.

06. HOW CAN I MAXIMIZE VALUATION?

Investors will size up your company’s worth by the caliber of its leadership, so build a first-rate management team and board of directors. Second, avoid accusations of inadequate disclosure like those directed at Facebook, or criticisms of accounting methods (Groupon); be sure to disclose all appropriate financial details early, using industry standard accounting methods, with updates throughout.

07. WHAT ELSE CAN I DO IN THE MONTHS BEFORE AN IPO?

“Act like a public company—track quarterly and annual projections, conduct mock earnings calls,” says John Waldron, global head of investment banking services at Goldman Sachs. Such moves convey that you run a well-oiled machine.

08. HOW WILL MY COMPANY GAIN EXPOSURE TO INVESTORS?

A year before an IPO, “begin a dialogue with about 10 of the leading investors in a given sector so they can start to track your company’s evolution,” Waldron says. Once the SEC okays your IPO registration, expect to go on a two-week road show in which your company’s management and underwriting teams meet with institutional investors. “This is when you build up a book of demand for your stock and see what investors are willing to pay,” Sheriff says.

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09. WILL I GET EXPOSURE TO BOTH RETAIL AND INSTITUTIONAL INVESTORS?

Deep-pocketed institutional investors are generally the most sought-after, but also look for an excellent retail sales force.

10. WHAT HAPPENS AFTER THE IPO?

If you’ve secured the right underwriter, “the IPO is just the beginning of the road,” Paschke says. Many underwriters will continue to stimulate investor interest by calling on investors to keep your company’s story alive and highlighting the stock at investment conferences.

For more information, contact: Brett Paschke, William Blair & Co., [email protected], 312.364.8657; Alan Sheriff, Solebury Capital, [email protected], 215.862.7234; John Waldron, Goldman Sachs, [email protected], 212.902.9544.