- Review registration rights, if applicable.
- Analyze post-IPO status of stockholders’ agreements and other restrictions on stock voting and transfer.
- Investigate public company director and officer insurance alternatives.
- Develop a business plan for use of IPO proceeds.
- Develop a plan for post-IPO board composition.
- Set up Company policies: code of ethics, insider trading rules, a disclosure policy, and a communications policy, to name a few.
Familiarize yourself with your corporate documents, such as your charter, bylaws and financing documents, to better understand the impact of the IPO process.
- Who holds registration rights?
- Do shareholders or third parties need to provide any special approvals?
- Upon an IPO, will your preferred stock convert automatically?
- Who has signed an 180-day “lock-up” agreement and who will not be locked up?
- Are your capitalization records accurate and up to date?
The potential liability for directors and officers is much higher in public companies than private companies, and it is crucial to keep this top of mind. Post-IPO securities litigation is common and widespread, and insurance costs are high.