Why readiness decides the timetable
Once banks are mandated and a timetable exists, every open issue becomes expensive: advisers wait, drafts are rewritten, and a market window can close. Companies that list smoothly usually spent the year before the kick-off behaving as if they were already public.
Readiness has two sides. Hard readiness is whether the company can meet legal and exchange requirements: audited figures, legal form, prospectus content. Soft readiness is whether investors will believe and buy the story, and whether management can operate under public scrutiny.
The eight dimensions
1. Strategy and equity story
- Is there a clear, differentiated strategy with a market investors understand?
- Does the plan show where growth comes from and what the capital will fund?
- Are the KPIs that prove the story already tracked and reliable?
2. Financial track record
- Audited financial statements for the periods required, under the required standards.
- A consistent history: no unexplained breaks, restatements or one-off items that dominate results.
- A business plan that bridges from history to the forecast in a way an analyst can model.
3. Reporting and closing
- A monthly close within a short, predictable number of working days.
- Quarterly reporting capability with commentary, not just numbers.
- Segment reporting that matches how management runs the business.
- Ability to produce a cash flow statement, equity reconciliation and notes without heroic effort.
4. Internal controls and risk management
- Documented key controls over revenue, purchasing, payroll, treasury, closing and IT.
- A risk register owned by management and discussed by the board.
- An internal audit function, or a plan for one.
- Clear authority limits and segregation of duties.
5. Governance
- A board with the composition the market expects, including independent members.
- Audit committee with financial expertise; remuneration and nomination committees as needed.
- Rules of procedure, a corporate governance code assessment and a conflict-of-interest policy.
- Transparent remuneration structures for management.
6. Legal and tax structure
- The issuer has the right legal form for the target venue.
- Group structure is simple enough to explain in the prospectus.
- Shareholder agreements, special rights and side letters reviewed and, where needed, terminated at listing.
- Related-party transactions on arm's length terms and documented.
- Tax risks identified; transfer pricing documented.
7. People
- A CFO with capital markets experience, or strong support.
- Investor relations capability, at least planned and budgeted.
- Legal and compliance capacity for disclosure, insider lists and managers' transactions.
- Key-person risk addressed: succession, retention and incentive plans.
8. Systems and data
- Reporting and consolidation systems that can deliver faster closes.
- Data quality for the KPIs used in the story.
- Information security and a process for controlling price-sensitive information.
Running a readiness assessment
- Score each dimension honestly with the people who do the work, not only with management. The readiness assessment tool gives a structured starting point.
- Classify gaps by impact on the timetable: gaps that block a prospectus (for example missing audited figures), gaps investors will price in (weak governance), and gaps that can be closed after listing with a credible plan.
- Estimate the time to close each gap, including audit cycles. Restating prior years can take months.
- Assign owners and budget. Readiness work usually needs external help in reporting, legal restructuring and governance.
- Re-assess quarterly until the board decides to start the IPO project.
Typical red flags
- Accounting under local standards only, with a large conversion effort to IFRS or US GAAP ahead.
- Audit qualifications or unresolved auditor findings.
- Revenue concentrated in a few customers without long-term contracts.
- Key assets, IP or contracts held outside the issuing group.
- Material litigation or regulatory investigations.
- Founder and company finances intertwined.
- KPIs in the pitch that the systems cannot produce consistently.
None of these automatically rules out an IPO. They do need a plan, a timeline and, often, a frank explanation in the prospectus.
A practical rule
If the company cannot today produce a clean quarterly pack, with a consolidated P&L, balance sheet, cash flow and KPI commentary, within about three weeks of quarter-end, readiness work should start with finance. Everything else in the IPO depends on it.
Work through the full list in the IPO readiness checklist.