A successful IPO requires close collaboration between a multitude of internal and external parties, meaning it is imperative that 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 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.

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 (EGC).
  • Drafting of the F-pages and supporting tie-outs in accordance with SEC Regulation S-X.
  • Assisting management with the preparation of the MD&A and investor materials.
  • Acting 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.
  • Developing accounting policies, entity-level controls, and drafting of technical accounting position papers.

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Risk Advisors

External risk advisors can support companies in enabling clearer visibility of the SOX 404a and 404b compliance timeline and internal audit requirements in addition to supporting 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 enable your critical business functions to focus on business as usual by supporting:

  • Governance, planning, and 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 strategic cost improvement analysis and system strategy, selection, advisory, and implementation support.

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.

Investor Strategic Communications

Experience and understanding how the financial world views and values your business is essential well before and well past an IPO. Identifying a collaborative team of sector experts that provides investor access, strategic communications, capital markets advisory, and investor relations aids companies in highlighting key differentiators and unique value to key stakeholders such as investors, customers, and employees. ICR, a strategic partner of CrossCountry, for example, drives the following solutions:

  • Ensuring access to all potential investors who could support business and growth plans. This additional level of market insight and connection increases the company’s visibility among a wider pool of investors.
  • Public relations team with which to collaborate when generating consistent, positive, and well-messaged coverage that underscores industry positioning all while tracking against business objectives.
  • Capital markets advisors with seasoned experience and deep connectivity to top banks and law firms can provide unbiased advice to senior management, boards, and sponsors while considering an IPO to ensure an efficient process while educating their clients.
  • Assistance with the development and strategy around the company’s positioning, analyst relations, investor outreach, and quarterly and annual result communications should be driven by an experienced investor relations team.

Financial Printer

Preparing public filings, including registration statements, requires the involvement of a financial printer that can ensure the SEC filing process is handled appropriately. Increasingly, there are cloud solutions in the marketplace that enable electronic filing of SEC documents and can be implemented well in advance of an IPO to facilitate a more efficient financial reporting process.

DFIN, a strategic partner of CrossCountry, helps private companies accelerate their IPO process with ActiveDisclosure, an affordable, secure financial reporting software. ActiveDisclosure helps drive reporting efficiencies with purpose-built, collaborative filing tools you can use throughout your journey from private to public.

Labor/Employment Law Advisors

High-growth companies on a path to an IPO can find maintaining compliance with ever-changing labor and employment laws to be extremely challenging, particularly if they operate across multiple jurisdictions. Hiring a law firm that specializes in labor and employment law compliance, such as Reed Smith LLP, can help a company to reduce the risk of material compliance issues impacting the IPO timeline.

“Our labor and employment lawyers expertly review and assess companies’ executive employment and other work agreements, employee handbook and other policies, classification of exempt employees and independent contractors, and more,” said Cindy Minniti and Mark Goldstein, two of Reed Smith’s top partners and labor law specialists. “This also includes identifying and mitigating potential risk related to background check processes, pay practices, and compliance with newly adopted federal, state, and local workplace regulations.”

They can also advise your company on how labor law compliance procedures can be implemented internally as the company transitions to operating as a public company, further reducing the potential risk of future lawsuits, fines, or penalties.

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.