Before any startup begins the process of preparing for an IPO, a complete reassessment of the company?s risk management and risk responsibilities needs to be performed. New and old stakeholders, including but not limited to auditors, regulators, analysts, investors, and directors, will have a great impact on the company?s risks and ability to stay compliant over the course of the coming pre-IPO period and into the future as a public company.
Assessing your startup?s risk before going public is an ongoing process and should include:
- Being aware of all regulatory changes that can affect your business.
- Setting and managing the expectations of all shareholders.
- Making sure that your financial projections and goals are realistic.
These are some of the main pillars that your risk management plan should be built around as they are some of the determining factors related to the many new and complex risks that your startup will face once it goes public.
What are some of the concerns handling the transition to a public company?
Many private companies evaluating the potential transition from private to public ownership should consider the factors involved in the transition. An initial public offering (IPO) comes with a myriad of financial and operational concerns, ranging from public disclosure requirements to additional regulatory compliance infrastructure, to confidentiality and trade secret concerns. IPO candidates should confirm that their current private company insurances, with regard to terms, structure, and limits, provides comprehensive pre-IPO coverage to provide a seamless transition to public company status.
What are the risk management requirements?