Going public: achieving a successful IPO

Eliran Glazer at monday.com offers some top tips for IPO success, from preparation to execution

 

Going public marks a pivotal moment for companies aiming for sustained growth. By tapping into public investments, businesses can secure the capital necessary for scaling operations, pursuing expansion, and making strategic acquisitions. 

 

The IPO market is gaining momentum, with global IPOs having raised $52.2 billion since January. High-profile companies such as Reddit, Raspberry Pi, and Arm have recently transitioned to public ownership, raising substantial capital that underpins their future growth and expansion strategies.

 

In 2021, monday.com went public on NASDAQ, a strategic move that has been pivotal in driving our growth and enhancing our operational capabilities. The success of our IPO and the ongoing trust of our investors are largely due to our strong execution and ability to navigate the complexities of an evolving market, supported by a resilient and well-connected team.

 

Our experience underscores several critical steps that are essential for any company considering going public.

 

The CFO-CEO relationship 

The role of the CFO is evolving significantly. It is no longer just about crunching the numbers. Today, CFOs must be integral to the executive team, working closely with the CEO to enhance company operations, efficiency, and resilience during transition periods. This partnership extends beyond the finance department and influences the entire strategic direction of the company.

 

As companies prepare for significant milestones such as an IPO, the CFO’s role becomes even more essential. Their expertise in financial forecasting and strategic risk management allows them to navigate the complex challenges of the IPO process. Moreover, CFOs are now key players in stakeholder engagement, tasked with building and maintaining investor confidence and long-term trust.

 

The art of financial storytelling

CFOs play a crucial role in bridging the gap between a company and its investors. Effective investor relations involve much more than simply presenting financial data to the board. CFOs enhance these relations by crafting and communicating financial information within the context of a well-defined company narrative. This narrative aligns with the broader strategic goals set by the CEO, ensuring that financial reports illustrate the company’s future trajectory and potential.

 

A clear and compelling company vision is vital for cultivating long-lasting relationships with investors. It helps in making the company’s prospects exciting and relatable, fostering a sense of trust and partnership. 

 

Planning for a marathon

The journey toward an IPO is a marathon, not a sprint. The public market can be unforgiving if businesses are not ready to make the transition. CFOs, therefore, must maintain transparency in their financial projections and engage in detailed scenario planning to anticipate various market conditions.

 

Challenges are inevitable, particularly with fluctuating macroeconomic climates. During these times, it is crucial for CFOs to demonstrate resilience and maintain a focus on a long-term successful execution. This includes having proactive strategies in place and continuously monitoring market trends to adapt financial plans accordingly.

 

Openness about financial metrics and market dynamics is essential, as it allows CFOs to adjust their strategies in alignment with the broader economic environment, thereby progressing at a measured and strategic pace.

 

Establish data integrity 

Before going public, CFOs must establish an IPO-ready infrastructure that supports data integrity and accuracy. This infrastructure typically includes cloud-based ERP, CRM, budgeting and forecasting, and equity management systems, which collectively improve the speed and accuracy of data used in forecasts and actual results.

 

Automation software is also crucial, as it facilitates the financial close process by seamlessly transferring data between systems and automatically formatting documents. By having this integrated technological approach, CFOs are able to meet the stringent disclosure requirements and tight deadlines faced by public companies.

 

Investing in your team

Success in navigating an IPO relies heavily on the strength and readiness of your team. It’s crucial to strategically hire and nurture top talent at the right time to propel the company forward during the IPO process and beyond.

 

During the critical phase of IPO preparation, building a cohesive and well-prepared team is essential. Team members, especially those encountering the IPO process for the first time, face a steep learning curve. Investing in comprehensive coaching and training is imperative to ensure everyone understands and is aligned with the company’s strategic objectives and vision.

 

Building stakeholder trust 

A key role of CFOs is to fulfil their commitments to investors, with their success and trustworthiness reflected in their spending and strategic decisions. Effective CFOs evaluate whether to hire new talent or utilise existing team resources, decide on expanding into new markets or strengthening existing ones, and ensure that these decisions align with the company’s broader strategic vision. In turn, these decisions help CFOs deliver on their promise of driving sustained profitability.

 

Aligning internal capabilities with market opportunities and investor expectations is crucial. With these strategies in mind, companies can approach the IPO process not just as a financial exercise but as a comprehensive strategic manoeuvre that positions them for long-term success in the public markets.

 

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Eliran Glazer is CFO at monday.com 

 

Main image courtesy of iStockPhoto.com and PashaIgnatov