Monday, April 24, 2023

Words of Wisdom from Leslie's CFO panel at the 10th Annual IPO Summit

     On April 17, 2023, Class V Group co-hosted the 10th Annual IPO Summit at the NYSE attended by hundreds of private company founders, CEOs and CFOs. At that event Leslie moderated a discussion entitled  “CFO Leadership in Times of Uncertainty” featuring Tricia Tolivar, CFO of CAVA and John Rucker, CFO of Arcadia.  Below are a few insightful takeaways from that event.

  1. Uncertainty is the new normal. It is important to have a clear mission.The mission should be the North Star of the organization in times of uncertainty and for the CFO, to be the steadying force. Develop a strong 3 to 5 year mission-driven plan and 12 month rolling tactical plans. Stay agile and communicate, communicate, communicate. Develop clear KPIs for workstream owners.

  2. Do not expect a magical period of calm in which you will have time to focus on maturing the organization and developing public company readiness. You should be doing both simultaneously, operating the business and actively maturing the organization.  Almost everything you need to do to operate successfully in the public markets, you will want to do anyway to build a sustainable/thriving/enduring business, whether an IPO window opens up or not. 

  3. It takes time to become IPO ready. Pick a date 18 to 24 months in the future and work back. Develop a multi functional work plan that includes each part of the organization that will have a role. In addition to finance and legal this includes HR, IT, Comms and more. Start with your data. A sound data strategy is critical to public company readiness. 

  4. Expensive top down IPO readiness assessments may not be the best place to start for most young organizations. We prefer more tactical focused assessments with subject matter experts as partners who can not only help assess a technical area but can also provide tactical, affordable resources to help your team learn and remediate.

  5. Build knowledge within your organization, Do as much of the tactical readiness work as you possibly can in house because that knowledge will be critical to your success once public. Bring in advisors to support your organization's learning so that your team is strong and ready. An advisor should act like a personal trainer, helping you develop the internal discipline and muscle to succeed as a public company.

  6. Hire an experienced independent advisor to help you develop and execute your cross departmental IPO readiness plan and project. Some advisors are focused just on the transaction or investor relations. The best advisors provide senior level attention and get in the trenches with management and their teams building public company know-how..The right advisor can help you avoid costly mistakes on the path to readiness and should be 100% independent, working for the company and company only. Beware of advisors who get paid by your bankers, if they are paid like bankers they will operate like bankers.

  7. A CFO should be ready to step up to lead the company through the IPO process to take your company public. If you are the right financial operations leader for your business you can be the CFO who takes the company public. Let your chosen advisor help you navigate what you do not know.

  8. Be Prepared. Emerging growth companies are held to a public company standard as soon as the meetings with bankers and public investors begin. Work to develop relationships and a track record of delivering before you go public but make sure your story is crisp and clear.  Be confident that your organization is ready to deliver before you step out on the stage. 

  9. Bring your board along for the journey. Visibility and delivering by successfully leading the public company readiness process underpins support. Your board can be tremendously helpful during the IPO process and you can learn from their experience, but at the end of the day, your team must call the shots. You will have to live with the outcomes. 

  10. The Panel Projects that the IPO window opens later this year. At the Summit, our panelists painted an optimistic outlook for the IPO market citing signs the market is healing and potentially opening in the back half of this year. For example they saw block trades and marketed follow-on offerings coming back at increasingly narrow discounts indicating investor appetite for new issuance is recovering.