Frequently Asked Questions

How does Exchange Listing provide Pre-IPO Counsel?

As Pre IPO Advisors, we guide our clients through the highly specialized and complex process of getting listed on a senior stock exchange.

This includes:

  • Designing a strategic plan that meets the company’s objectives and defining a capital structure and valuation that attracts investors.
  • Identifying, introducing and evaluating the appropriate professional team including investment banker, legal counsel and auditor.
  • Organizing and structuring internal systems and controls that help a company scale toward an IPO.
  • Proving valuable expertise in pre IPO financial planning and analysis (FP&A).
  • Setting up proper internal governance practices to make sure the company has a diverse mix of directors with the right experience.
  • Making strategic recommendations such as directing pre-IPO companies to outsource technical expertise in areas such as accounting, compliance and corporate governance.

How does Exchange Listing work with clients after the listing is completed?

Our Capital Market Advisory work continues past the day when a company is listed or uplisted on a senior stock exchange.

Following a listing our ongoing IPO counsel includes:

  • Working with newly listed companies and their investment bankers
  • Helping companies to identify when the timing is right and structure to raise more capital
  • Advising and guiding clients in looking at opportunities for growth, including mergers & acquisitions
  • Identifying business expansion opportunities as well as seeking out strategic partners
  • Counseling clients on “non-deal” roadshows, conferences, outward facing communications and capital market awareness

Does Exchange Listing work with both US domestic and global enterprises?

Our clients are based in markets around the globe, including North America and Europe.

What does Exchange Listing look for when preparing a company for an IPO?

There are certain factors we look for in preparing a company for an IPO. These include:

  • A rising trend in money following certain industry niches or companies
  • The volume of IPO activity and performance and seeing where liquidity is flowing into new public offerings
  • The “Retail Revolution” where a new group of retail investors are trading due to the ease of entry
  • Industry “buzz” is being shared in peer conversations, at events and conferences
  • Consistent news coverage on an emerging market niche or company

What size must a company be for an IPO?

While there is no specific size requirement for a company to go public, most operate at a certain level – generally, for public investors, the scale is around $100 (+) million in revenue. However, companies with as little as $50 million in revenue can go public if they demonstrate growth potential.

How costly is the IPO process?

There are one-time costs related to the IPO process as well as ongoing costs for your firm to operate as a public company.

But if your company has certain elements in place, there could be savings along the way. We work with clients to reduce the front end and overall costs of an IPO. These including:

  • Underwriting Fee: This is the most significant expense incurred as part of the IPO. On average, costs to companies range from an average of 5% to 7.0% of gross IPO proceeds, in addition to due diligence and underwriter legal fees which can be negotiated.
  • Allow plenty of time: Start the planning process early but be sure to build in additional time in case things don’t go exactly as planned . This will save you money.
  • Be selective in choosing a professional team and service providers who have a track record of working with similar size and related- business enterprises.
  • Fixed Rates: When possible, negotiate fixed or flat rate fee agreements and avoid open-ended agreements.

What industries does Exchange Listing specialize in?

Exchange Listing specializes in Capital Market Advisory services for companies in a wide array of industries, including medical technology, healthcare, fintech and renewable energy, among others. In general, we look for high growth companies in emerging markets.

What are the advantages of going public for a small-mid-size company?

There are multiple advantages for smaller, high growth companies, especially those in emerging industries, to move toward an initial public offering (IPO).These include:

1. Creating more capital-raising opportunities and financing options, typically at a higher valuation and a lower cost of capital.

2. Establishing a value for the company’s securities by creating a public market for them.

3. Increasing liquidity for existing and future investors and providing an exit strategy for venture and institutional investors.

4. Providing gravitas and visibility that is often associated with being a public company which may, in turn, generate greater interest and awareness of the company.

5. Creating a second currency with the Company’s common stock to use that equity instead of cash for acquisitions, attracting and compensating management, employees, directors and strategic partners.

What is the process of getting enlisted?

The IPO process is divided into three distinct parts:

Pre-filing:

In this “quiet period,” a company contracts with an investment banking firm (which acts as a managing underwriter) and decides to proceed with the public offering. They file a registration statement with the SEC, and limits are placed on the company’s public communications.

Waiting Period:

The waiting period begins from the date of the registration statement with SEC to its effective period. During this period, the company is only permitted to make oral offers or certain written offers. Moreover, by conforming to certain conditions, a company can take part in written communications regarding the selling or buying of securities relating to a registered offer. Furthermore, the company is also not allowed to enter any binding agreements about the sales of the securities.

Pricing and Post-Effective Period:

The post-effective period starts as soon as the registration statement is declared effective by the SEC and ends with the completion of the offering. At this point, the underwriters are no longer required to deliver a prospectus according to the Securities Act. During this period, sales and certain communications such as free writing prospectuses (for an IPO issuer, it must be accompanied or preceded by a final prospectus) are allowed.

How is an IPO offering priced?

In most cases, after the “roadshow,” representatives of a company and underwriters will meet to decide the offering price – one of the key stages in preparing for an IPO. In small IPOs, the offering price is determined by the book runner, while in major IPOs, underwriters are required for this process. The offering price will be set on the basis of the demand for the stock, current market conditions, and the price range stated in the preliminary prospectus referred to as the book-building process. If there is a significant change in the numbers of shares of the offering that are not priced within the range, a free writing prospectus is then issued to the investors to ensure they have sufficient information regarding the shares.

Who is involved in an IPO?

An IPO team consists of a lead underwriter (typically an investment bank), co-managers (underwriters), an independent auditing firm with a significant amount of industry? experience, legal counsel, a transfer agent, and a financial printer. Exchange Listing has an experienced internal IPO team, including CEO, CFO, general counsel, and an investor/public relations manager.