Six Steps To A Successful IPO

With stakes as high as this, it is critical to use a registrar with the expertise and knowledge to manage the multiple steps required to ensure a successful listing.

When is the right time?

Companies are comfortable staying private for longer, and the growth of private market exchanges has helped to bridge the gap between remaining private and going public.

Going public means additional exposure to analysts and market conditions but also provides liquidity and encourages further investment. Market conditions remain the driving factor as to when a company chooses to launch an IPO, but there are other fundamental elements that need to be considered when a company is looking to list their shares on a public market.

As the UK’s leading registrar, we’ve successfully supported hundreds of companies through their IPO. Using that experience, we have written this guide to a successful IPO.

1. Management of the cap table

Pre-IPO, a company will undertake a reorganisation of its share capital table. This will consolidate investors into the single Ordinary share trading class. 

EQ can maintain this register, taking the administrative burden from your team, enabling them to focus on the key milestones of the IPO.

2. Adopt listed company disciplines and practices

As the company will now be under public scrutiny, it will be essential to create a listed company governance framework ahead of the IPO. This will help identify key positions on key committees, such as Audit and Remuneration, and Nomination, along with terms of reference, schedule of matters reserved to the Board, a proper Board calendar and Board papers processes.

Selecting the right management team to coordinate resources is crucial. Your investors will need to have full confidence in this team. At least 50% of the Board should be made up of Non-Executive Directors, excluding the Chairman. You should also bear in mind that financial due diligence will uncover everything, so make sure you identify any issues or risks which may impact on the IPO so that these can be addressed.

This framework will form a part of the Financial Review process; therefore, it is important that the company chooses its advisers carefully to ensure it receives the correct support and guidance. 
EQ provides company secretarial support to assist a company to create this framework.

3. Develop your investor story and enable investor realisation

Develop your investor story 
As you develop your investor story, having the right support in place can make a significant difference. Through EQ’s integrated partnership with Notified, companies can benefit from a combination of experienced, consultative guidance and a connected suite of investor relations tools.

Together, these capabilities help teams deliver clear, compliant and high quality communications at each key milestone – from earnings calls and investor days to ongoing stakeholder engagement. Notified is trusted by 50% of the Fortune 100 to deliver these events and communications, supported by a full service approach that spans planning through to post event analytics.

By bringing investor relations planning, execution and insight together, organisations can reduce operational complexity, communicate with confidence, and consistently present a compelling story to the market.

Enable your investor realisation 
It is common for a company to make arrangement for existing investors and employees to be able to benefit from the IPO by selling any shares they hold. It is critical that this process is managed effectively as the investors often include early institutional investors and senior managers. It is usual that these shares are held within an existing nominee vehicle, that will need to be unwound. For any existing shareholders that wish to hold or have lock-in arrangements for an agreed period after the IPO, EQ can provide a new nominee vehicle. From within the nominee, we can arrange individual share sales, enter into underwriting agreements and manage orderly sell downs of large positions to ensure share price stability.

4. Share settlement project management

Managing the setup of the share class and depositing the initial IPO shares into CREST, the UKs electronic share settlement system, is a very technical process, requiring specific documentation and procedures. This is what EQ as a registrar does, very well.
Whether you are a UK or non-UK company, EQ is very experienced in managing complex IPOs, with selling shareholder projects, and has the full service offering and expertise to support a company’s bespoke needs.

We will project manage the process from end-to-end, so you can give 100% of your focus to the investor messaging.  

5. Employee reward and retention policies

Once listed, many companies will want to incentivise and retain their employees leading up to the IPO or at the IPO stage. This can be achieved by offering employee share schemes, which promote employee ownership and can greatly assist with staff retention and recruitment, as well as improve performance levels.

From all employee share plans through to Discretionary awards, EQ provides a fully outsourced administration, including the design and launch of communications to encourage employee awareness and take-up levels.

6. Don't underestimate the time required to launch a successful IPO 

It is common for the entire process to require 18-36 months to get from the initial scoping through to the date your shares are first admitted to trading. With regards to the appointment of a registrar, we recommend you bring us in as soon as possible. EQ is able to respond quickly, supporting all of your pre and post IPO needs, but we are seeing more complexity with recent companies; including non-UK companies requiring specific products to support their listing, supporting the initial and early investors to realise value by selling into the IPO, and the need to design and deliver employee incentive and reward schemes in line with the IPO process.

Advice on post IPO management

The first year following an IPO can be challenging with lots of changes. This is why Equiniti provides its clients with a dedicated Relationship Management team who are there to offer guidance and support. In addition to regular meetings, we support companies to deliver on their corporate events, such as hosting shareholder meetings and making dividend payments. We also host collaborative events aimed at sharing best practice, focus groups, and ensuring our clients are prepared and informed of ongoing industry developments. All of this, while of course providing on-going company secretarial support and advice.