Assembling the IPO Team: Tips for CFOs

Assembling the IPO Team

The decision to go public is a significant turning point for a fast-growing company — and its chief financial officer.

The CFO is largely responsible for laying the groundwork for a successful initial public offering (IPO), and ensuring the company has the right financial infrastructure and controls in place to make this major transition successfully. 

But the CFO doesn’t do all of this alone. He or she also needs to be able to rely on the support of a solid IPO team of accounting and finance professionals, as well as skilled and experienced consultants and other expert advisers.

The CFO must first assemble this IPO team, however. Here are a few things CFOs should do to make sure they have the requisite resources in place:

Assess the skills and expertise of your current team.

As a business moves from being a private company or startup to operating as a publicly traded company, a major cultural shift is inevitable. The new rules, processes and technologies will most certainly require restructuring and, more than likely, expansion of the current financial team.

Twelve months before an IPO is a good time to start taking stock of your existing staff to determine who is best suited for this new way of conducting business. This assessment will help you determine where additional resources are needed and identify skills gaps.

Size up the management ranks.

Does your company need to strengthen its leadership bench? Are there essential roles that need to be filled or added?

It can take time to hire senior-level executives and other specialized talent in the current employment market. Consider bringing in interim management consultants to help keep IPO preparations — and everyday business — moving forward during your search.

You may also find you could benefit by bringing in an interim executive who has been part of a successful IPO to help navigate your organization through the process.

Think long term.

Post-IPO, the CFO spends much less time managing day-to-day financial operations than he or she did when the company was private. Expect to have an expanded leadership role, in which you will be responsible for handling a diverse range of high-level activities including strategic and operational decision-making, monitoring risk and compliance issues, identifying value-adding activities for the business, overseeing big data initiatives, and helping to drive innovation.

It is therefore wise for CFOs to consider — and budget for — future staffing needs while the company is in the pre-IPO stage. For example, you will likely need to hire a controller and other trusted high-level professionals who have deep knowledge of forecasting and budget planning, automated finance and accounting systems, U.S. Securities and Exchange Commission (SEC) regulations, complex tax codes and reporting, and financial compliance mandates, such as Sarbanes-Oxley (SOX).

Outsource when necessary.

CFOs may not be able to — or need to — hire full-time employees to fulfill every single task before, during and after an IPO. Augmenting staff with senior-level project consultants can be an efficient and cost-effective choice if the company is short-staffed or needs specialized expertise that is not available internally — or only needed for a specific initiative.

Long- or short-term finance and accounting consultants can assist with the preparation of IPO documents, help establish an investor relations program, or set up internal audit processes. They can also be tapped to handle core accounting and finance tasks so that your primary team can devote most of their time to pre-IPO activities.

In addition, consultants can evaluate and implement enterprise resource planning (ERP), customer relationship management (CRM) and other essential business systems that the company will need to operate efficiently after the IPO.

Lean on experienced advisers.

There are other resources that CFOs must be sure are aligned in order for the company to execute a successful IPO. Legal advisers, underwriters, accounting companies and audit firms are just some examples.

However, because CFOs need to join the CEO in a pre-IPO road show, and oversee completion of Form-S1 IPO registration documentation, they don’t have much time to devote to these important tasks. That’s why many choose to bring in an IPO adviser to handle everything from selecting bankers to negotiating deals with stock exchanges.

Many CFOs, especially those going through the IPO process for the first time, also look to their peers for wisdom and guidance. This includes gathering tips on how to help the business, and its employees, manage through change that will result from one of the most significant business transformations the company will ever experience.

Additional resources

Stay Private or Go Public? Should your company pursue an IPO, and if so, when is the right time? What are the advantages of staying private or going public? This Protiviti webinar, hosted by Protiviti managing director Steve Hobbs and featuring insights from business leaders and financial and market experts, helps to answer these questions and more. You can access the webinar here.

An Uncertain Road: The Potential Risks and Rewards of Working for a Pre-IPO Company: Helping to build a business from the ground up and getting it ready for an IPO is an extraordinary career-building adventure for any financial executive. Just be sure that you fasten your seat belt.

Four Things to Know Before Your IPO: What companies don’t know about the IPO process can drive an offering off the rails in a hurry. Protiviti managing director Jim DeLoach shares some advice for staying on track.

Tim Hird is executive director of Robert Half Management Resources. 

Tags: Consulting, IPO