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Sounding boards

An IPO is one giant step for a growing company. Rick Thompson explains how non-executives help make the move a bit easier for entrepreneurs.

What is the DNA of companies that look to go from private to public? At Cantor Fitzgerald we spend a lot of time sifting through potential IPO candidates. Public listing is for the minority of companies we see, not the majority.

Management has to ask itself: “If I were writing my own cheque, would this proposition grab me?” If the answer is no, then it is unlikely to grab the attention of new investors either. We may spend several years courting potential IPOs, whether the company is earlier stage, or a more mature business. We are not just discussing the merits of listing, we help them compare and contrast other potential routes to finance. 

There are companies that have already had some form of independent finance (third-party investment). Investors may be keen to exit their investment, or to take the company to its logical next step. The company might have been through friends and family, EIS or VCT money and then private equity. Those companies are arguably of most interest. The management team might have been schooled by private equity firms and will be focused on growth already. The company might be thinking about a secondary buy-out, or they might consider the other obvious option – an IPO.

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