Planning for an IPO? Why early preparation is key

Taking your business public is a significant milestone that requires a strategic approach and careful planning. Changes to corporate governance in the UK, mean that businesses intending to go through an Initial Public Offering (IPO must begin their preparations as soon as possible to ensure success.

UK corporate governance landscape

In 2025, the UK will introduce new corporate governance standards under the new Audit, Reporting and Governance Authority (ARGA), which will replace the Financial Reporting Council (FRC). These changes mean businesses aiming to list will need to focus on:

  • Stronger internal controls to ensure robust and accurate financial reporting
  • Enhanced Board accountability with Directors bearing more responsibility for governance and transparency.
  • Higher reporting standards with timely and high-quality financial information

Why early preparation matters for IPOs

An IPO signifies is more than a mere financial achievement; it is a transformation of a business to meet the highest standards of governance, reporting, and stakeholder engagement. Early preparation enables you to:

  • Enhance investor confidence by presenting a compelling equity story to create demand from potential investors, increasing their confidence and interest in the IPO
  • Develop systems, processes, and teams to support life as a public company. Recruiting experienced leaders and embedding best practices takes time.
  • Identify and address governance requirements before being subjected to investor scrutiny
  • Reduce costs and delays by ensuring you have time to secure advisors, auditors and talent for your business
  • Reduced risks by identifying and addressing potential issues before they become critical

Starting early not only streamlines the IPO process but also positions your company for long-term success in the public markets

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The risks of rushing IPO Readiness

Companies that delay IPO preparation risk reducing their valuation and market confidence. The potential issues include:

  • Restated Financial Statements: Hastily prepared financial statements may contain errors or lack the necessary detail which can undermine investor confidence and valuations issues.
  • Weak Internal Controls can lead to operational inefficiencies and increased risk of fraud or mismanagement
  • Addressing governance issues after listing is often more time-consuming and expensive.
  • Reputational damage can occur if the IPO is poorly executed, making it harder to attract investors
  • Missed Opportunities to launch your IPO when the best market conditions are available

Seizing the right moment for your IPO

Market conditions always fluctuate. You need to be ready to act when the time is right. Being completely ready for an IPO means your business can capitalise on timely market opportunities but also delivers longer term benefits including:

  • Improved management and financial processes
  • Greater transparency that builds investor trust
  • Positive investor sentiment can drive up the stock price post-IPO
  • Flexibility to pursue alternative strategies, such as private M&A opportunities, if market conditions shift

Steps to prepare for an IPO

Preparing for an IPO is about more than ticking regulatory boxes, it’s means ensuring your business is ready to thrive as a public company. You should focus your efforts on:

  1. Aligning with ARGA’s forthcoming standards to strengthen internal controls and enhance board oversight
  2. Work with auditors to ensure your financial statements meet regulatory requirements including those for any recent acquisitions.
  3. Build a team with experience in public company operations and investor relations
  4. Develop a compelling story for investors, backed by strong governance and a clear growth strategy

Start your IPO journey

A successful initial public offering (IPO) is usually the result of early and comprehensive preparation. By focusing on critical areas at this stage, you can confidently navigate the dynamic governance landscape and position your business for sustained growth and success.

Ready to assess your IPO readiness? Use our online tool to get a personalised report and start preparing for the future.

IPO Readiness Assessment here

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