The liquidity phase of your journey could very well be the exit you’ve envisioned from the beginning—or perhaps it’s more about gearing up for a whole new phase of growth. Regardless of your plan, the preparation is essentially the same. Everything from solid accounting and compliance practices to building a three to five-year projection model to effectively pitching your financial story to potential buyers and investors.
Additionally, there’s a heavy focus on tax, forecasting and financial reporting during a liquidity event. In the case of an IPO, integration of ERP software is critical to achieve the proper controls. If you continued to build out these competencies from the start, you’ll be better equipped to navigate transaction requirements and maximize the opportunities that come your way. However, even the best planning can be thwarted by unfavorable market conditions. In this case, it may be best to press the pause button on a transaction and shift your focus on improving efficiencies and reducing costs.
Potential paths to liquidity:
- Going public through an IPO or other structure
- M&A: merging with a similar company or being acquired by a competitor, larger company or suitor
- Secondary market transaction: sale to a new or existing investor without a change of control
- A private equity sale
Key questions to ask:
- What is the current valuation of our company?
- What transaction makes the most sense in the current market environment?
- Are we audit ready? Are we prepared for due diligence?
- Is the right ERP software in place to meet transaction reporting requirements?
- Are we properly prepared to be acquired or positioned to be a public company?
Unlocking value across the business lifecycle – BPM’s blueprint for growth for innovative companies
You’re still working hard to get your business off the ground, but also envisioning and planning for the road ahead.
Your business is rapidly expanding in terms of revenues, products, funding and hiring.