Preparing For An IPO Or A Big PE Fund Raise

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Preparing For An IPO Or A Big PE Fund Raise

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Preparing For An IPO Or A Big PE Fund Raise

  1. 1. Preparing for an IPO or a Big PE fund raise Experiences shared by:
  2. 2. Every Entrepreneur’s DreamI want to grow myCompany exponentiallyand receive recognitionacross the world. But, the biggest hurdle to growth most times is access to Funds 2
  3. 3. Deciding on Funding StrategySources of Business Fund: • Personal Saving, Family & Friends • Bank Borrowing (Working & Long Term Capital) • Private Equity / Venture Capital • Initial Public Offering (IPO)Tips: • Balanced Portfolio (Debt / Equity) • Watch Dilution • Equity is not Profit. Invest wisely. • Negotiate well and seek Professional help if required 3
  4. 4. External Funding – Few Myths• I will have to report to someone …investors are like strategic partners and not bosses. Good Reporting and Complete Transparency very important.• I will not borrow money. I will invest and grow based on what I have. …e.g. buying a property. Price escalation in 3 to 4 years is 3x avg min. Home loan best option to lock in opportunity. Don’t let the opportunity go• By giving some equity in my company I will reduce my profit share …e.g. Owning 100% of a Co. that generates 100 vs. owning 75% of a Co. that generates 1,000 4
  5. 5. Build a good Business Plan Products and Executive Company Cover Page Services Summary Overview Offering Market Manufacturing Management Financial Analysis and or Operation Team Overview Plan Process Market Current Closing Use of Proceeds Comparables Offering Remarks (Deals/Value)Note: Ensure you build an extensive and detailed financial forecast model.Do run some sensitivity scenarios and track your actuals vs. budgets. 5
  6. 6. People Planning• Identify your Core Team• Develop and Implement Incentive Plans to retain talent and to achieve/beat numbers• Strengthen your Finance & Accounting Department • Ensure you have a good CFO • Staff the team adequately • FP&A & Investor Relations 6
  7. 7. Strengthen Systems and Processes (few examples)• Implement robust Accounting Systems: • Illustrations: • Bank Reconciliation (Cheque Return - Finance Company) • Bank Interest (rate reduction benefit) • Cost Centre Accounting: Poor MIS – wrong business decision• Ensure timely and complete Statutory Compliances: • Illustrations: • ROC Annual Report • Disallowances of expenses and penalties• Cash Flow Forecasting : 2 years Plan and 13 weeks Rolling forecast• Receivables & Payables Management: Revenue is Vanity, Profit is Sanity, Cash is Reality• Risk Management: Use of available Business Insurance, Forex Hedging, Strengthening Business Contracts/Agreements, IT Policy, etc. 7
  8. 8. Good Corporate Governance Directors Appointment & Induction Separation of Chairman & CEO Roles Independent Directors Board Committees:  Audit Committee  Compensation Committee  Nomination Committee Reporting of CFO & Auditors Whistle Blower Policy Conduct of BOD Meetings 8
  9. 9. Preparing for Due Diligence Promoter / Management Diligence Business Diligence Finance Diligence Technical Diligence Legal & Compliances DiligencePlan and Prepare well in advance to avoid last minute rush and a long list ofdeficiency. Also try & create a secured data room for speedy and efficiency. 9
  10. 10. Most Important Select the right IBanker, Lawyer and other advisors Negotiate well with all advisors Discuss & Debate Valuations/Fund Raise size andvarious scenarios, in detail, in advance Plan and Prepare thoroughly for Investor Meetings.Undertake dry run’s and avoid over reliance on technologyfor presentations Work with a good IR/PR firm and maintain ongoingrelationship with all Investors (whether invested or not) 10
  11. 11. Kick Off A New Journey 11
  12. 12. Thank YouSuperCFO Services Pvt. Ltd.104, Marathon Max, Mulund - Goregaon Link Road,Mulund (West), Mumbai: 400 080, India.Phone: + 91 22 259 26052 / 57Email: info@SuperCFO.comWebsite: www. SuperCFO.comFollow Us 12

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