From Kitchen Table to IPO – What’s your strategy?

During the dotcom era, the Holy Grail was to found a technology company, get capital, list it then move on. But very few achieved this. In fact the few that did setup business that listed generally hung around and had some fascinating learning experiences on the way.

So on the 17th April at the Churchill Club, we ran a programme called “from Kitchen table to IPO”. Which was a look at those experience. We were joined by Silvio Salom of Adacel Technologies Ltd , Leon Lau of Peoplebank Ltd and Michael Abela of Mobi Ltd .

The evening was a look at what has been learnt by founders of public company’s in three areas:

A. The underlying strategy for going public
B. The issues around selecting advisors, and
C. The new skills to be acquired.

This week I wanted to pass on the main points (as noted by me) that were made by our panel around the strategy of going public:

1. Know exactly you are going to list and what you are going to do with the money. Because if you don’t your share price will tank and you will get removed.

2. You are either listing to be rewarded and exiting, or, to get access to capital. Decide which it is before you float. If its get access to capital, make sure you leave room for going back to the market.

3. The business better be prepared to grow with the capital before you list. Because you are simply not going to have time to address these operational problems effectively afterwards.

4. Accounting systems, operations and governance should be tidy before the float, not afterwards. See above.

5. Be prepared for a new job (CEO of a Public Company) to be added on top of your existing job (managing the business). The CEO’s job is a completely new set of tasks which may take you years to master.

6. Be prepared for at least 400 new shareholders holding you personally accountable for the share price. They will ring you!

7. Be prepared to no longer control your business. Its no longer your shop. You effectively need to have 20-30% equity to control what’s going on.

8. Think carefully about how you want to list. A small market capitalization (say less than $100M) means low liquidity for shareholders (not many buyers or sellers) which translate to an inability to raise further capital. Analysts and brokers will not be interested in you either.

Next week, the issues around selecting an advisor.

Sorry, the comment form is closed at this time.