IPO/SPAC Consultants & Teams: What They Do & How They Help
From project road mapping to post-public endeavors, the IPO or SPAC process is wrought with financial, legal, and regulatory complexity. As such, it is important to consider turning to a trusted IPO or SPAC consultant or team to help guide the process in the right direction – especially considering that over 80% of IPOs fail.
As experts in helping startups and emerging growth companies successfully navigate the path of going public, we’ve outlined some essential information about IPO and SPAC consultants and teams – and some of the signs it’s time to consider hiring one.
Important things to know about IPO or SPAC consultants and teams:
- What an IPO/SPAC is and common IPO/SPAC activities
- What an IPO/SPAC consultant or team does and the skills they have
- The benefits of hiring an IPO/SPAC consultant or team
- The signs it’s time to hire an IPO/SPAC consultant or team
What is an IPO or SPAC?
An IPO or initial public offering is a long and demanding process in which a private organization sells its shares via the stock exchange, thus becoming a publicly traded organization.
A SPAC or a Special Purpose Acquisition Company is a type of investment in which an organization attempts to raise capital through an IPO but has the intention of acquiring an existing operating company in order to successfully go public.
Both IPOs and SPACs are incredibly beneficial for providing access to new markets, gaining an influx of additional capital, establishing more brand visibility and recognition, obtaining flexibility in capital structure, and achieving long-term stability.
However, while they bring many benefits, both the IPO and SPAC processes are incredibly complex and require a hefty focus on legal, regulatory, financial, and accounting due diligence – which can be particularly challenging for startups and emerging growth companies due to a lack of internal resources and expertise.
Common IPO/SPAC activities:
- Project road mapping & management
- Financial, legal & regulatory due diligence
- Registration statement drafting
- SEC filings & disclosure requirements
- Audit readiness & support
- SOX compliance
- Investor relationship management
- IPO pricing, roadshow & share allocation
- Post-IPO/SPAC compliance & SEC reporting
What does an IPO or SPAC consultant or team do?
An IPO or SPAC consultant or team of consultants have a wide range of expertise in technical accounting, change management, financial advisory, and project management which they utilize to guide the IPO process in the right direction, ensure resources are allocated as efficiently as possible, and step in to juggle ever-evolving requests from auditors and investors.
From strategic planning and financial statement preparation to determining appropriate valuation and pricing of shares, IPO and SPAC consultants or teams have the expertise that is needed to foster alignment, save time, and make sure the IPO or SPAC is completely swiftly and successfully.
Skills and duties of IPO and SPAC consultants and teams:
- Managing the IPO or SPAC project by developing roadmaps, tracking progress and ensuring proper allocation of resources.
- Drafting sections of the S-1/S-4 Registration Statement.
- Uplifting historical financial statements (F-Pages) to conform to SEC reporting requirements.
- Ensuring a smooth audit process, collaborating with auditors and assisting with the development of auditable financial statements.
- Assisting in the “quarterization” of historical financial information as needed.
- Providing comment letter assistance by fostering collaboration with the SEC and responding to comments in a timely manner.
- Guiding an organization through the implementation of SOX compliance requirements and their related management certifications.
- Assisting with 10-K and 10-Q filing requirements and supporting an organization with other post-IPO duties as needed.
What are the benefits of hiring an IPO or SPAC Consultant?
- Ensures proper planning and allocation of resources.
- Helps support the implementation of more efficient, scalable, and cost-effective processes and technology.
- Ensures compliance with laws and regulations.
- Helps overcome issues with business fundamentals or governance.
- Helps to seamlessly manage SEC, auditor, and investor requests.
When should you hire an IPO or SPAC consultant or team?
If you’re considering an IPO or SPAC, it’s essential to turn to a consultant or team as soon as possible, as they will be able to provide the guidance you need to tackle all the financial, legal, and regulatory matters quickly, effectively, and with little interruptions to your day-to-day operations.
Signs it’s time to hire an IPO or SPAC consultant or team:
- There’s nobody on your current team who has IPO or SPAC experience.
- You’re running into issues relating to resource constraints and need guidance to help manage and execute various IPO/SPAC-related tasks.
- You’ve made the strategic decision to go public but aren’t sure where to start.
- Your organization has a complex ownership structure or international operations and need guidance to ensure all aspects of the IPO or SPAC are accounted for.
- It’s challenging or too time-consuming to conduct the necessary financial, legal, and regulatory due diligence.
- You need support to determine proper SPAC valuation and/or IPO pricing.
- You’re looking to go public within a certain time frame and need help to streamline the process.