Part 1: Preparing for the IPO
So, your client wants to file for an IPO, and they’re relying on you to help guide them throughout the process. First of all, congratulations! Second, take a deep breath, it’s going to be a challenging road ahead. The truth is that, as exciting as helping a company go public is, the PR strategy for a company preparing for an IPO differs drastically from that of private companies.
The number one thing to consider when developing communications plans for pre-IPO companies: You’re suddenly speaking to a drastically larger audience than ever before. Media, analysts, investors, and a legal team are attuned in the company’s messaging and public appearance. PR firms must structure their strategies accordingly.
The IPO filing process is normally a months-long, back-and-forth ordeal between the Securities and Exchange Commission (SEC) and the filing company. Perhaps most crucial to a smoothly run IPO is the planning that occurs in advance of the SEC filing. As a public relations team for a pre-IPO company, you’ll have to work with the other stakeholders to craft a story and messaging strategy that everyone agrees to and can support for the duration of the process. Here are a few tips for making that process run smoothly.
Establish a Pre-IPO Media Cadence
After a private company files its S-1, it must undergo a quiet period until the SEC deems the filing effective. During this quiet period, companies are limited about what they can discuss publicly.
Quiet period regulations prevent company employees from saying anything that may be perceived as an attempt to inflate a stock price. However, these regulations allow private companies to “continue to publish factual business information that is regularly released and intended for use by persons other than in their capacity as investors or potential investors.”
In other words, companies can continue to publish regular updates, such as product releases, during this quiet period, so long as they represent “regularly released” information. In preparation for this quiet period between filing for the IPO and the actual listing day, (and many others during future earnings calls), companies must create a regular cadence of news. This cadence will also serve an important purpose immediately following the IPO, which we’ll discuss in part 2 of this series.
Build Your Support Infrastructure
Private companies typically build relationships with media and analysts. Public companies must incorporate a legal arm and investor relations into their daily strategy, along with their continued media and analyst relations. As a PR team, you’ll have to interface with these other teams regularly. Get to know them early in the process and keep in regular communication with them.
Refine Your Messaging
Business publications will perform their own due diligence by speaking with customers (if available), investors and other third parties to determine how well they envision your product meeting the market’s needs. Ensuring your PR team has a strong story about the client company and product ahead of the IPO will help you control this message. Activities, such as an investor positioning workshop can help provide your client with a better understanding of how to manage changing market conditions, valuation expectations and regular company performance updates.
Plan Official Spokesperson Policy
Who will be media/analyst/investor-facing during the IPO listing period (from filing to listing day)? Will they represent the company after the listing? Get your client’s executives lined up and nail down their talking points. Similarly, urge your client to implement safeguards that prevent non-official spokespeople from speaking with external sources. These safeguard methods should include media training for the spokespeople who will be public-facing. Your PR team will be tasked with ensuring they are well prepared for a new range of questions and topics.
Act Like You’re Already Supporting a Public Company
Once the IPO is filed, the company will need to report quarterly earnings and brace for potential fluctuations in financial news. The best way to prepare for this change is to practice. Develop a culture within your PR team so that all team members are ready for a steady cadence of heavily scrutinized financial updates and quiet periods.
Ensure the Client’s Website is Up-to-Date
During quiet periods and lulls in news cycles, your client’s website will relate its messaging to the public. Spend time with your client updating language on the website and all corporate-owned digital assets. Now that your client is going public, they’ll need an investor relations page, legal statements and copy that match the story they want to tell about their soon-to-be-public company.
Remember: This Is Just the Beginning
You and your client have now done a lot of the heavy lifting: research, syncing across multiple teams, honing storylines and developing public-facing strategies. Next, it’s time to file and put that strategy into action. In the next installment of our ABCs of IPOs post, we’ll look at listing day and post-IPO tips. Stay tuned …