A Communicator’s Path to a Successful IPO

This is a guest post by by Debra Raine, senior partner at Finn Partners.

IPO-1This is a guest post by by Debra Raine, senior partner at Finn Partners.

The discipline of planning and executing a clear and controlled communications campaign for an IPO holds companies in great stead. They will not only build IPO credentials, they also build the necessary frameworks for other exits and liquidity events.  After all, the moment any plan is written and approved, events change – so the plan must change. This is true of business, marketing, sales and operational plans. All plans must anticipate change. Baking flexibility and change into a communication plan means it should be able to build toward and through an IPO *and* ensure a well constructed runway should an alternative path be needed.

Get the Basics Right

At the pre-IPO stage, communicators need to focus intently on compliance risk. When followed thoughtfully and consistently, these steps minimize risk and balance the interest of compliance and message clarity.  The earlier the process is started though, the greater the value that can be built into the intangible and tangible assets of a business – by for example showcasing the breadth of executive bench-strength, differentiating and shining a light on the company’s IP, executing a cadence of business and market momentum stories for at least 12 months prior to an IPO.

  • Start early. Create a formal and consistent communications infrastructure and process *at least* a year before the anticipated listing date.
  • Reach key audiences worldwide. Don’t overlook the global nature of your audience and investment community; and focus on earning your share of voice and business credentials across earned and owned content and influencer channels.
  • Develop a formal disclosure policy. Conduct training sessions with internal audiences to ensure buy-in.
  • Develop a detailed message platform. Make sure it reveals the value of the company’s tangible and intangible assets. Do not use hyperbole.

These investments in “storytelling” will yield ample rewards throughout the IPO process – from 18 months out, through the “quiet period” and in the aftermarket.

Get the Messages Right

Do not underestimate the intricacy of message development and do not over-rely on common sense. In developing messages:

  • Focus on track record. You are addressing a congenitally skeptical audience that values proof and disdains hyperbole. As much as possible, your messages should focus on the company’s credentials and performance track record as an illustration of its ability to deliver predictable results.
  • Address risks proactively. Risk assessment and disclosure will be an important part of your life as a public company. The company’s messages should avoid generic risk disclosures and articulate a thoughtful approach assessing and mitigating internal vulnerabilities and external threats.
  • Address extra-financial risks. Traditional risk disclosures focus on financial and operational vulnerabilities. Increasingly, extra-financial risks including environmental, social governance (ESG) practices weigh heavily on investor decisions.
  • Develop a guidance strategy. Not all companies provide formal numeric “guidance” to help investors forecast financial and operating results. But, in various qualitative forms, all companies provide guidance, even if they don’t explicitly forecast results. No guidance strategy is perfect, but the communicator can make sure that the strategy optimally balances the financial community’s need to know with the company’s need to protect sensitive information.

Involve your agency early. Really. They are your trusted partner.  Your advisor. The earlier they are part of the process, the easier and better the running the business while running the IPO will be.

Communicate Internally

Many corporate communicators at the pre-IPO stage naturally focus more on how employees may affect the IPO – say, by not adhering to the disclosure policy — and they show less interest in how the IPO may affect the employees. In addition to ensuring employee compliance, communicators also need to:

  • Brand the IPO internally to minimize any adverse perceptions of the event.
  • Treat the IPO as an important milestone in the execution of a long-term strategic vision.
  • Show how the IPO empowers the company and that it doesn’t merely substitute Wall Street expectations for the company’s founding passions.

This process socializes the brand message and business proposition throughout the employee base.  They are an often overlooked advocate community and under-estimated risk. It is critical to bring employees on the journey with you. That they feel not like bystanders to the journey.

Get the balance right – Never lose sight of the job in hand

Ask executives about what they wish they knew before embarking on an IPO and you will likely get similar answers as new mothers.  They never anticipated how hard and all consuming the process was, and transformative the event would be.  The amount of work involved in an IPO is similar to doing double duty.  It is like having two jobs.  Your day job; and your IPO. That is the case at nearly all executive and executive support positions.   Don’t lose sight of the day to day while also preparing for the future.  Because continuity is everything.  IPO dates move, change, morph.  Some take place.  Many do not.

Debra Raine is a senior partner at Finn Partners. You can find Debra on LinkedIn or Twitter.