Readiness can be Everything: How Atlanta Startups Can Strategically Prepare for an Evolving IPO Market

Initial Public Offerings (IPO) are transformative events for any company, unlocking access to capital and boosting brand value. The IPO market, however, is unpredictable. IPO windows fluctuate, opening and closing at any moment in reaction to external events such as elections, military conflicts, and interest rates. 

The market completed a window cycle of high IPO activity through late 2021, with more than 800 U.S.-based companies going public through a traditional IPO or Special Purpose Acquisition Company (SPAC) merger since 2020. While the markets have been relatively quiet in 2022 and 2023, if history has taught us anything, it is that the IPO market is cyclical and we anticipate its return eventually. 

Atlanta’s startup scene is buzzing with innovation making it a prime location for companies eyeing the public market. Metro Atlanta has experienced a remarkable increase in new companies over the past year, surpassing growth rates in any other U.S. city.2 The region’s reputation as a dynamic hub for technological innovation further propels this momentum, attracting startups and aspiring young professionals seeking careers in the industry.

Atlanta-based startups seeking to go public will likely need to be strategic about their approach, especially regarding timing and readiness. Without good readiness planning, their IPO journey can be chaotic, resulting in a potential missed opportunity.

But how can Atlanta-area companies know when it’s an ideal time to pursue an IPO? And when should they start getting their legal, financial, and regulatory ducks in a row? Because the current economic market is more volatile than in recent past, many companies are delaying going public and shifting their focus toward profitability and growth. While it’s uncertain when the next IPO window will open, it could happen quicker than many think. 


Readiness lessons learned

To better understand IPO readiness requirements, Deloitte surveyed CEOs and CFOs who took their companies public during the 2020 and 2021 surge to understand what they learned. The results revealed a series of key insights that can advise companies to take advantage of momentum in the IPO market.

Readiness can be key

The first step is to evaluate the requirements, processes, and pros and cons involved in filing an IPO to determine an ideal course for your company. There is no perfect time to go public, but if you start preparing early, you will likely be ahead of the curve. Early planning allows organizations to prepare to operate as a public company, focus on marketing the offering, and button up the details needed to prepare the market and execute the transaction. Business leaders should consider starting 18 to 24 months before the anticipated public listing date. If you wait to prepare until the IPO window has already opened, you may miss the opportunity.

Audits & Accurate Forecasts 

Two areas of focus that can make or break a company’s ability to complete an IPO are the upgrading of its financial statement audits from a private company audit to a public company audit and an ability to accurately forecast. 

Upgrading a company’s audit to be compliant with public company requirements, which are much more rigorous, can be time consuming. This should be one of the first actions taken when a company starts to prepare and should take place prior to the opening of an IPO window. 

Further, a company’s ability to expediently conduct internal forecasting is also critical. In fact, it was the No. 1 lesson learned from C-suite executives who took companies public during the IPO surge. Public companies need to deliver their financial planning and analysis (FP&A) more quickly than is typical in a private environment. IPO-seeking companies should be prepared to adequately forecast and meet those forecasts in shorter timeframes. Missing projections can carry significant ramifications for companies, so they should also be ready to explain why it happened. 


Enlist Advisors

Next step: enlist help. Working with an experienced, independent advisor provides the trusted guidance needed to work through all stages of the pre-IPO preparation process. Among many areas, accounting advisors can help:

  • Educate a company on the process and required IPO preparation steps
  • Advise the company in identifying gaps that should be remediated in order to be public company ready
  • Advise a company on SEC reporting, technical accounting, and control implementation necessary to be public company ready
  • Advise with the accounting through the execution of the IPO 


Digital resources like Deloitte’s IPO SelfAssess tool can also help measure your company’s readiness for a public exit and provide customized guidance based on the company’s responses, on the necessary steps to prepare. IPO SelfAssess helps companies identify the key areas to focus on, such as capital markets strategies, financial reporting, and legal/corporate governance. 

It’s also important to assess your internal team, identifying the skillsets and bandwidth your team will need to complete an IPO. Companies should work towards building teams that have the competencies to effectively navigate the transition to becoming a public company. This may include reassessing their legal counsel, internal auditors, and tax professionals.


Define Your Story

The ability to communicate your company’s growth story is important, too. CFOs and CEOs need to be able to clearly communicate growth equity aspects such as the company’s growth and vision, its plans to improve performance metrics, its market opportunity, its competitive advantage, its suite of products or services offered and the value in the current environment. The ability to articulate your growth story and communicate with analysts is important to gaining investor support. 

The conversations Deloitte had with CEOs and CFOs revealed that when companies failed to consider the need for critical steps like brand and story building, they found themselves scrambling as their public offering date approached.


Acting early on governance

Lastly, companies need to prepare for their new corporate governance requirements as a public company. One of the biggest pre-IPO challenges Deloitte sees is the amount of time and effort required to recruit the appropriate board members to fill critical governance needs. It’s important to identify these members early rather than waiting until the end of the IPO process, as the right members may not be available. Proper governance and board oversight will strengthen the quality of financial statements produced by management.


Final thoughts on the IPO Market 

Every IPO is a unique journey. While the IPO process can be complex, with the proper preparation, a company can effectively take advantage of the transformative opportunity. While it’s unclear when the next IPO window will open, with a roadmap in place, companies in blooming startup centers like Atlanta may be able to ride the next IPO wave and reap the benefits.


Robert Kerr Deloitte Robert Kerr is an Audit & Assurance partner with Deloitte & Touche LLP and is a leader in Deloitte’s Capital Markets Transactions service offering for the Atlanta, Birmingham, and Chattanooga markets.

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