A successful IPO requires close collaboration between a multitude of internal and external parties, meaning it is imperative management have a thorough understanding of the third parties it will need to engage as part of its IPO team.

Below is a summary of some key third parties a CFO and Controller will want to engage in an IPO and their respective areas of focus:


Underwriters are often considered to “run the show” and are responsible for marketing and managing the sale of companies’ stock to investors. Companies have to consider an array of factors while choosing an underwriter, including their understanding of the business, ability to position the company’s story, experience with the industry, and reputation.

Once chosen, the underwriters’ functions in an IPO include, but are not limited, to:

  • Allocation of shares among the purchasers.
  • Determination of the number of shares that can be sold.
  • Determination of the price per share.
  • Providing feedback on the prospectus.
  • Assisting with the development of the roadshow materials.
ipo preparation challenges

SEC Counsel

SEC counsel is responsible for guiding the company through the offering and its various filings with the SEC. The role of SEC counsel includes:

  • Assisting with the preparation of the registration statement and advising the company on disclosure requirements compliance.
  • Overseeing required filings with the SEC, including responding to SEC comment letters.
  • Advising the company on corporate governance requirements.
  • Assisting the company to set the legal strategy post-IPO (e.g., future M&A, additional financings).

Accounting Advisors

External accounting advisors can enable a company’s accounting function to continue to focus on day-to-day activities while they manage technical accounting matters and drafting of financial statements for the registration statement. The role of accounting advisors can include the following areas of responsibility:

  • Implications of a company’s qualification as an Emerging Growth Company.
  • Drafting of the F-pages and supporting tie-outs in accordance with SEC Regulation S-X.
  • Assist management with the preparation of the MD&A and investor materials.
  • Act as the main point of contact and project manager of the audit process.
  • Quarterization of historical interim periods so they are audit-ready for SAS 100 review by auditors.
  • Development of accounting policies, entity-level controls, and drafting of technical accounting position papers.

Tax Consultants

Transitioning to a public company can have extensive tax implications and may also involve a company establishing a new tax function within its finance organization. Key considerations for both internal and external tax teams include:

  • Legal Tax Structure: Companies should reevaluate their current tax structure and consider if it is optimal for a public company environment.
  • Internal Controls: Companies should assess and implement tax-related internal controls, particularly where a company is establishing a new tax function.
  • Tax Position: Companies should assess tax positions to ensure there is an appropriate tax plan in place in advance of a transition to operating as a public company.
IPO preparation timeline

Risk Advisors

External risk advisors can support companies in enabling clearer visibility of the SOX 404 compliance timeline as well as support the company in achieving critical steps to ensure compliance obligations are met. These include:

  • Internal Controls over Financial Reporting (ICFR): ICFR provides assurance around completeness and accuracy of the company’s financial statements. Formalizing ICFR will serve as the foundation for establishing SOX compliance and facilitate management’s ability to fulfill its financial reporting responsibilities.
  • Internal Audit: An Internal Audit function is essential to protecting the health of a company and promoting sound corporate governance, proactive risk management, and strong compliance practices. Certain stock exchanges will require companies to have an Internal Audit function, e.g., NYSE. Establishing an Internal Audit function is a key line of defense for an effective risk management program.

Transformation Advisors

An IPO can create significant transformation across the organization and require extensive resources to effectively enable public-company readiness. Transformation Advisors can enable your critical business functions to focus on business as usual by supporting:

  • Governance, Planning & Program Management: A company considering an IPO should establish strategic governance and planning processes to execute complex strategic transactions with a consistent approach to project management, change management, and communications.
  • Operational Readiness: Companies should prepare for and assess their ability to perform critical post-IPO operations, including new process controls, technology transitions, and reporting requirements.
  • Post-Transaction Optimization: Newly public companies should assess their business processes to identify opportunities to optimize and automate their workflows and operations to grow the business and minimize costs. It’s important to engage partners to support enterprise cost improvement analysis and system strategy, selection, advisory, and implementation support.

In addition to the roles listed above, other parties a company will have to consider engaging in an IPO include compensation specialists, financial printers, and investor relations firms. In our extensive experience, we have found early planning for an anticipated IPO, including assembling the IPO team, to be a critical step in ensuring a successful and efficient IPO process.

For expert support on the IPO journey, contact CrossCountry Consulting.