The road to an initial public offering (IPO) can be long and arduous, and when not well planned and executed, subject to many missteps. Consider what happened recently to the Israeli biotech company, Vascular Biogenics (VBL Therapeutics). The company went public with an offering of 5.4 million shares. Less than a week later, the underwriters, Deutsche Bank and Wells Fargo Securities, LLC, terminated the offering when an existing shareholder did not fund payment for shares it previously agreed to purchase in the offering, according to a VBL Therapeutics press release.
While VBL’s pullback is clearly a draconian scenario, other mistakes abound as companies move toward an IPO. What are the most common mistakes on the path to an IPO? How can your company prevent them, and what can you do if you’re already in the thick of them? Our team of experts at Westwicke tackled these questions recently in a round-table discussion. Here are excerpts of the conversation.
Your board is telling you to go public. Your peers are telling you that this IPO window may close at any moment. You believe your company is compelling enough for an IPO, but are you actually in the position to get one done in short order? How can you make an IPO move faster?
In my last post, I went over key — and sometimes overlooked — housekeeping items you can do to hit the ground running for an IPO, such as ensuring you have the right lawyers and auditors in place and getting a head start on your presentation and website. In this post, I’ll go over strategic choices that you’ll want to think through as soon as possible to improve your chances of a speedy and successful entry into the public markets.
Despite some signs of resistance, initial public offerings (IPOs) continue to move along at a robust pace. With fears that the window may close, some company boards and management teams find themselves scrambling to enter the mix before it is too late. Perhaps by reflex, the first thing they often do is pick up the phone to call an investment bank.
However, before you join their ranks and take your first banker pitch, there are some key – and sometimes overlooked – steps you can take now to ensure you hit the ground running.
Preparing for an initial public offering can be a daunting task. Once the process kicks off, the wheels spin faster and faster, with deadlines and opinions flying around from everyone involved. What can ease the burden and streamline the process?
Collectively, our team has helped hundreds of companies prepare for their IPOs, and seen the best and worst of what can happen during the process. We consider the year before the transaction critical and recommend these 10 must-do steps.
The road show you take in conjunction with your company’s initial public offering (IPO) represents an exciting and action-packed two weeks. Over that period, you will crisscross the country, meet hundreds of potential investors and spend way too much time on airport tarmacs. While your bankers will have thoroughly prepared you to deliver your “story” to the Street, I thought it would be helpful to share some other thoughts about road shows based upon the thousands of IPO road show meetings Westwicke team members have participated in during our Wall Street careers. Here is my list of the top 10 things bankers probably won’t tell you about IPO road shows:
- You are always on stage. Be respectful and professional at all times – not just in the meeting but in the waiting area and car, as well. Often you will be traveling with an institutional salesperson so remember that this person has a relationship with the analyst or portfolio manager you are about to meet…don’t say anything that would allow them to give negative “color” to their clients.
- Let the person on the other side of the table get the question out. I see this all the time: senior management begins to answer the question in the middle of the question. Let the analyst or portfolio manager completely ask his or her question. Then, clearly answer that question. Continue Reading
We have been fortunate, and sometimes unfortunate, to have observed hundreds of companies go through an initial public offering (IPO) process, and then begin trading as a public company. What is astounding is how frequently healthcare IPOs “blow up” within the first few quarters of their public life. This happens so much so that a small group of investors has made a career of buying these broken IPOs. Why? Because they know that a broken IPO does not necessarily make a broken company.
The challenge, of course, is that once a newly priced IPO blows up, and the stock drops to a point where it is deemed broken, there is an incredible amount of work, credibility re-building, energy and time required to gain back lost valuation and earn back Wall Street’s trust.
Why do companies blow up and when does permanent credibility damage occur? Here are the most common issues that we see:
As CEOs and CFOs, you no doubt think long and hard about the investment bank with which you want to work. Most management teams consider which investment bankers can best help meet their company’s capital raising and strategic needs, as well as which bank’s sell-side analysts will provide quality research coverage of the company. However, it is also important to consider how impactful the bank’s institutional equity sales force is.
Whether you are already public or thinking of going public, you want to work with a sales force that has real influence in the investment community. Importantly, you want to engage a team that has solid, long-term relationships with those investors who will be buying your stock.
“An investment in knowledge pays the best interest” – Benjamin Franklin
Welcome to the new blog of Westwicke Partners, the largest healthcare-focused investor relations and capital markets advisory firm in the country. Here, we’ll be sharing wisdom, insights and knowledge about all aspects of investor relations (IR) and the capital markets with a specific emphasis on what’s important for CEOs, CFOs and IROs at life sciences, medical technology, and healthcare services/HCIT companies.
Who we are
All of the members of the Westwicke team who will be penning posts are seasoned Wall Street experts: former sell-side research analysts, buy-side analysts and portfolio managers, investment bankers, institutional salespeople, and equity capital markets professionals. We’ll be sharing our views based on our collective 200 years of Wall Street experience, a deep knowledge of the healthcare industry, and a history of successful strategic partnership with our clients.