Here are six best practices you can implement after your initial IPO that will have you six steps closer to adding another zero to your revenue.
6 Best Practices to Implement After an IPO
1. Maintain control
The fear of losing control over your “baby” after the IPO is a legitimate one. After years of calling the shots and making all the decisions, you now have investors and other stakeholders to consider.
Going public also leads to massive growth in a very short amount of time. How will you be able to keep up with the pace? With more people using your solution, will it hold up under the added pressure? How can you maintain a great user experience for so many new users?
One of the keys to maintaining control at this juncture - especially if it’s a tech IPO - is having a fully-dedicated software development partner at your side that can scale up or down as needed. And trust us when we say, after the initial IPO, you’ll be scaling up...a lot.
2. Maintain growth
From new markets to new product offerings to acquisitions, the post-IPO phase is when startups have the opportunity to turn into unicorns. And in order to continue and even surpass growth expectations, they have to continue to deliver on their promises and focus on two things: innovation and excellence.
For example, Slack - which recently had its IPO in June of this year and is currently valued at $28 billion - is enhancing its growth rate by investing in hosting capabilities in countries outside the U.S., such as Europe and Japan. Although their primary user base is located in the states, they are growing substantially in these other countries and want to provide those users with the same level of service and support.
3. Keep investors updated (and interested)
You can’t soar past the competition and stand out from the crowd using outdated technology. In order to keep investors and users interested, it’s important to stay ahead of the game when it comes to implementing the latest technologies.
Investors need to know that their money is being put to good use on next-generation solutions that will stand the test of time and bring a high value return.
4. Meet (and beat!) expectations
Under-promise and over-deliver. Your job is now to enhance shareholder value. As a newly listed company, investors want to make sure you are delivering on all your promises - both to them and to your user base. Be honest and transparent and resist the urge to over-hype everything. Meeting expectations and over-delivering on your promises increases investor confidence.
All of your software updates and improvements have to be done accurately and on-time. Your development partner will be able to ensure that any needed updates happen seamlessly, securely, and timely.
5. Maintain regulatory compliance
Going from a privately owned company to a public one is a whole new ballgame. Welcome to the world of regulatory compliance, security standards, developer’s certificates, and more.
You’re going to need help to ensure compliance in the form of a highly skilled consultant or compliance officer. Avoiding any types of SEC investigations or perceived inconsistencies in your reporting is crucial in order to protect your reputation.
6. Create a transparent workflow
Another way to build trust and increase confidence in your now public company is through transparency.
Make sure that you implement a transparent workflow as part of your overall business process. Set the highest level of integrity and standards for your entire organization and make sure that it is communicated well on a regular basis.
Upcoming IPOs to watch and learn from
If you really want to see what happens with a company after it goes public, pay attention to some of the ones that are going public this year. There are several high-profile IPOs expected to happen in the last half of 2019, including...
Home-sharing travel site Airbnb is expected to go public either later this year or early next year. The company is considering doing a direct listing as opposed to a traditional IPO. At last valuation, the company was worth approximately $30 billion.
Peloton filed preliminary paperwork for an IPO with the Securities and Exchange Commission on June 5th. Founded in 2012 and based in New York, the fitness company sells home-based gym equipment and subscription services for live and recorded workout sessions via the internet. Peloton is planning for an evaluation of $8 billion at IPO launch.
Founded in 2011, Postmates offers food and other types of delivery services in predominantly urban areas. The company recently filed paperwork with the SEC and is expected to go public later this year. Postmates was recently valued at $1.8 billion.
What success looks like after the IPO
From MVP to IPO, in good times and in bad, iTechArt stays with our clients and consistently follows their progress and success. Over 20 of our clients have reached the IPO milestone. Here are a few of their stories.
GAIN Capital, a global provider of online foreign exchange trading and related services with a presence in over 140 countries, went public in December of 2010. Just last month, the company, which was founded in 1999, released its Second Quarter 2019 financial results, reporting a net revenue of $75.5 million.
Fleetmatics - a SaaS provider of commercial vehicle GPS tracking solutions - held its IPO in October of 2012, raising $132.8 million. In August of 2016, the company, which had grown to 1,200 employees and approximately 37,000 customers, was acquired by Verizon for $2.4 billion.
EdTech company Blackboard, which was founded in 1997 as a learning management system (LMS), had its initial public offering in June of 2004, raising $70 million. In 2011, Blackboard was bought out by Providence Equity Partners for $1.64 billion.
There are many new business challenges that come with going public, including working with investors and maintaining growth. Before you move forward, you need to revisit and re-evaluate your original mission statement and make sure your goals are still aligned with your current business processes. What has worked and not worked in getting you to the point of IPO?
Just remember that the IPO is not the end of the road for a startup...it’s a brand new beginning.