Guide to Going Public
Do you have an alternative financing
strategy to execute instead of an IPO?
It is difficult to guarantee that equity market conditions will be right once
the preparation is complete. To help ensure that the right option is available
at the crucial moment, more companies are taking a dual- or multitrack
approach where they pursue a trade sale or other funding source, and
prepare for a possible IPO at the same time. The multitrack approach allows
you to keep your options open during the preparation process, in case the
IPO window closes during this often lengthy process. Thus, successful
companies have a Plan B and often a Plan C (for example, simultaneously
pursuing an IPO, a trade sale, special purpose acquisition company (SPAC)
merger or debt refinancing).
If the capital markets are volatile with falling valuations (IPO windows
closing) and you can afford to wait, you may elect to hold off until the
market conditions improve. It is imperative that you have the flexibility to
execute alternate financing strategies, in case the IPO does not happen or
needs to be delayed. In the meantime, if funds raised from other sources
can be used to increase the company's growth potential, the value of the
company may rise.
6| Guide to going public
Private:
Banks and M&A market
Public:
Capital market
Traditional IPO
Carve-out IPO
Strategic buyer
Bond
Reverse IPO
PE and VC
Mezzanine
Direct listing
Bank finance
Family office
Derivatives
SPAC merger
Other
Other
Other
Other
Debt
Equities
Debt
Equities
Single-, dual- or multitrack strategies
Choice of options, financial instruments and multitrack strategies
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