Bringing your company public is a big decision to make. While it can bring a large and sudden infusion of money to your operations, there are some things to consider. Everything from your company culture to your independence and agency as a business owner can shift with the decision to go public. Here’s what you need to know if you’re considering making your business a public entity.
The first thing you can expect if your company goes public is a period of quiet. The process of becoming an IPO can be a long period, and there will be a long period where your company can’t speak about the terms. But you can expect an intense amount of interest from the press. The most frustrating part is the amount of speculation involved in this period, because much of this will be negative and ill-informed. And since those involved in the IPO process can’t say anything, that wild speculation will inevitably snowball.
The process of going public can also make businesses far more vulnerable to lawsuits. Since becoming an IPO suggests that the company is flush with funds, frivolous lawsuits are likely, and that can feed back into the media circus. Also exacerbating the problem is the fact that wealth managers and investment banks will start aggressively pursuing employees to offer them financial services. For owners and managers who understand the complexities of the change, it’s important to provide a sense of certainty to your employees who may have trouble separating the speculation from the truth. Having a strong HR department in place can do a world of good in the days leading up to the day of IPO.
Just don’t expect things to go back to business as usual as soon as the IPO is approved. Many employees will be spending wildly in expectation of how the stock will rise, and new rules will be put in place for who can access financial and user data. This lockdown period can last 90 to 180 days on average, so it’s important to maintain strong communications through every layer of your business.
Fortunately, the storm of miscommunications will eventually settle down after the lockdown period. Becoming an IPO can be a beneficial move for plenty of businesses, but it’s important to make sure that you provide your staff with the support and resources they need during these rocky months.