Going public is one of the most consequential decisions a company can make. An IPO provides access to public capital markets, creates liquidity for existing shareholders, enhances the company's profile and credibility, and establishes a market-based valuation. But it also brings significant new obligations: quarterly financial reporting, regulatory compliance, shareholder scrutiny, and the discipline of managing to both short-term and long-term objectives simultaneously. Martin Sumichrast led the IPO of cbdMD in November 2017 and the $115 million NYSE IPO of Adara Acquisition Corp in February 2022, giving him direct experience with the demands of public market preparation.
A practical view of what it takes to be public-market ready
IPO preparation typically begins 12-18 months before the target offering date. Companies must establish the financial reporting infrastructure required of public companies, including audited financials prepared in accordance with GAAP, robust internal controls, and a financial reporting process that can reliably produce accurate quarterly results. They must build a governance structure appropriate for a public company, including an independent board with appropriate committees, a qualified audit committee with at least one financial expert, and documented policies covering conflicts of interest, insider trading, and related-party transactions.
Key considerations
The IPO process itself involves selecting underwriters, preparing a registration statement (Form S-1), completing the SEC review process, conducting a road show to institutional investors, pricing the offering, and completing the listing. Each step involves significant management time and external advisory costs. Underwriter selection is particularly important: the quality and institutional relationships of the investment banks chosen to lead the offering directly affect the success of the road show and the quality of the investor base assembled.
What this means in practice
Martin's perspective on IPO preparation emphasizes doing the work long before it is technically required. Companies that build the governance, financial reporting, and management infrastructure of a public company before they go to market are better prepared for the scrutiny of the IPO process and better positioned to succeed as a public company afterwards. The transition to public company life is more demanding than many executives anticipate. Having the right team, systems, and culture in place before the IPO is not just about compliance — it is about building the organizational capability to succeed in a much more demanding environment.