We recently worked with a private company to advise it on its IPO, resulting in a listing on a leading senior stock exchange.
In collaboration with our client, one of the first and most important steps we took was selecting the right investment banking partner. We advise our clients to take their time with this critical decision. Investment bankers play a key role in the IPO process, including valuing the business, pricing the offering and promoting the company’s shares to investors by managing the road show.
Remember, the IPO process – from initial planning to listing – can take up to 24 months, if not longer. Selecting an investment banker early on is critical.
Here are ten factors we look at for in an investment bank:
1. How well does the bank know your industry?
2. Who are the individuals at the bank who will lead the company’s offering and who will serve as your primary contact, and are you comfortable with their approach?
3. What are the most relevant, successful transactions they have worked on in your sector or a related industry?
4. In those other IPOs, how well did the stock perform following the listings?
5. Is the bank the right fit for the size and structure of your financing?
6. What is its proposed strategy to differentiate your company from other recent offerings in your sector?
7. Has the bank provided a description of the valuation methodology and a range to value your company?
8. Does the bank share your company’s values and excitement for this major milestone, and your vision for your company’s future?
9. What is the bank’s reputation? Your IPO Advisor will likely have relationships with the banks you are considering and know their track record.
10. What services does the bank provide after the listing; how will it assist with your company’s future financing and growth needs?
What characteristics do you look for in a banking partner?