Growing a company? Hard.
Hiring, motivating and retaining employees? Hard.
Preparing your company for an IPO? Really hard.
Finding the right IPO guidebook? Easy.
Equity administration is complex, no matter what stage your company is at. You may have just hired your first engineer, raised your Series B, become cash-flow positive, or maybe you’re ready for that exciting exit event. At Shareworks by Morgan Stanley, we enjoy working with our clients on complicated equity issues regardless of their stage. The pre-IPO phase wins the award for most complicated event, hands-down. And that’s why I’m excited to introduce Your IPO Journey interactive tool and our The IPO Journey Workbook with any company dreaming of the day they ring the bell.
Your tool kit to a successful IPO summit
We like to think of the IPO journey as a trip to the summit of Mt. Everest. It takes planning, expertise and the right tools.
- Explore the roles involved in the IPO and where the play a lead vs. supporting role with Your IPO Journey interactive tool
- Get all the detail with The IPO Journey Workbook, which gives work-back schedules for each role in the IPO process.
While the workbook presents a granular list of all the tasks associated with a successful IPO, I’d also like to make a few global comments based on the many IPOs I’ve helped support over the years.
- Hire the right team
You will often hear the advice that a company on the IPO journey needs to hire the right executive staff. There is no question that is great advice and a great CFO is especially important. You also need to hire the right global equity operator. This role is typically referred to as the stock administrator, but the role is better represented by a equity operations individual. Your employees will be excited to finally be able to liquidate some of their equity and you need someone who is really going to focus on this part of your business. Since equity plans affect your legal, finance, and HR groups, the equity operator should be a strategic thinker who can work across these cross-departmental groups. I recommend a company considers hiring an equity operator when they are between 250 and 500 employees. It’s worth it.
- Plan early
It’s never too early to start planning for your IPO. Processes needed to be documented, you need to hire the right people, and your internal systems need to be updated. All these things take time. Our IPO Journey guide starts at 18 months out from an IPO.
- Integrate your systems
An enterprise equity administration system like Shareworks can support your changing needs as you evolve from high-growth private company to a publicly traded one. The best equity administration tools will integrate with the following systems:
- HRIS and payroll — Your HRIS and payroll tools are the source of truth for your employee base. They maintain tax and demographic info, current addresses, department information, and job status — all of which is needed by the equity platform. And data integrity is vital in the pre-IPO phase. Having an automated feed from tools like ADP, Workday, Ultipro and others will minimize error and create efficiencies.
- Single-sign on (SSO) — Making things easy for employees is important. Your equity administration tool should be accessible to your participants through your Google Apps, Okta, or OneLogin portals.
- Determine internal and external communication strategy – What sort of advice and information should be provided? When? How?
- Total compensation tool — The IPO journey will create some challenges related to retention. Post-IPO, employees will invariably watch the stock price and think about joining that next hot startup. Consider giving employees a total comp statement that accurately shows the value of their equity holdings, giving them a clear reason to stick with you.
- Evaluate compensation program – Evaluate performance and competitiveness of existing equity compensation program and establish post-IPO goals. Compare your existing equity guidelines to the broader market using Option Impact database, free to privately held venture backed companies.
Get in touch
As you explore the breadth and depth of the IPO challenge, it’s normal to feel a little intimidated. That’s where the right guidance and support comes into play. We can get you from here to there. Speak to one of our IPO experts.