The Pre-IPO Road Show: 5 Steps CFOs Can Take to Prepare

Pre-IPO Road Show

It’s an exciting — and nerve-wracking — time: Your company is getting ready to go public. When an initial public offering (IPO) is in the works, the pre-IPO road show can help to generate buzz with analysts, the media and, of course, potential investors.

This is a new experience for many chief financial officers, however. CFOs are in the spotlight in the pre-IPO road show. Expect to spend about two weeks, if not longer, traveling with the chief executive officer — and perhaps other senior managers. You’ll need to meet a grueling schedule that may include five or more presentations a day.

A road show presentation typically includes the business outlook for your company, the reason for the IPO, financial information and a Q&A session. You’ll want to show a solid track record of growth, a plan to sustain it and how IPO proceeds will be used to maintain an upward trajectory. If your company is a fast-growing startup, you’ll have to present concrete research to support its long-term value to investors.

Here are five tips to help you get ready for what will likely be one of the most important moments in your career as a finance executive (no pressure, right?):

1. Practice, practice, practice.

Preparing an effective presentation, and rehearsing it until it's polished, can take months. Nailing the first presentation is essential because it’s usually video-recorded for the retail (electronic) road show.

Not only do you need to practice your part of the presentation, the presentation team needs to formally rehearse together. Many pre-IPO companies hire coaches to help executives overcome public-speaking jitters and get ready for the limelight.

2. Avoid overwhelming the audience.

CFOs love numbers, of course. But you need to be careful not to dive deep into financial minutiae during the road show presentation. Focus on facts that will be most important to the audience. Keep it simple, and you’ll keep the audience engaged.

3. Be a storyteller.

As part of the road show team, you’ll need to tell a compelling, interesting and entertaining story about the company and deliver it with passion. (You also should be ready to step in seamlessly for the CEO, just in case he or she can’t make it in time — or at all — to a presentation.)

4. Have a flexible presentation.

Know your material well enough to improvise and focus on a particular audience’s questions and goals. Assess what the audience already knows, and avoid rehashing that information.

An article in the Harvard Business Review recommends you start by asking your audience three questions and adapting your presentation based on their answers:

  • Are you familiar with our company?
  • Are you familiar with our industry?
  • Have you read the prospectus?

5. Be prepared for grueling Q&As.

During the pre-IPO road show, you’ll get probing questions from investors, analysts, the media, and others. Many inquiries will focus on the viability of the company. So, as you prepare for the road show, think about the questions that the most ardent skeptic might ask — and have strong responses, and facts, at the ready.

Good preparation, thorough research and careful planning are all key to executing a successful pre-IPO road show. Start early and give yourself enough practice time so you’ll be confident when it’s your turn to stand in the spotlight.

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Tags: IPO, CFO, Growth