By Zack Mukewa, Jackson Lin, and Jeff Tryka, CFA 

For companies aiming to list on the equity markets through an initial public offering (IPO) the road to success is intricate and demanding. This journey requires planning, forward thinking strategies and partnering with experts who grasp the complexities of U.S. Market landscapes. 

The Regulatory Landscape

The framework in the United States is intricate, marked by standards that often differ significantly from those in other nations. Effectively maneuvering through this environment entails more than compliance; it necessitates vision and expert counsel to smoothly navigate the Securities and Exchange Commission’s (SEC) thorough review process without encountering setbacks.  This is where choosing the right partner as SEC counsel can make a big difference and provide significant, immediate returns. 

Aligning with the Right Underwriters

Choosing the best potential underwriters plays a sizable role in IPO success. It is crucial to collaborate with firms that possess market influence while also sharing a dedication to your company’s long-term strategic objectives. The ideal underwriters understand how to position your company to attract investors interested in long-term returns and can significantly contribute to ensuring that your debut in the market accurately represents your company’s worth.  The right underwriters will also commit to your company for the long term, particularly in supporting trading in your shares after the IPO closes.  A good underwriter will also ask tough questions about the timing and strategic rationale for a transaction.  If market conditions are not optimal, perhaps it would be better to wait for a more opportune time to raise capital. 

Market Capitalization and Pricing

Determining the optimal IPO pricing strategy is crucial. It involves balancing current market conditions with the intrinsic value of the company to set a price that maximizes investor interest and supports robust market liquidity. This strategic pricing is vital for strong aftermarket performance and long-term capital appreciation.  Pricing is also intricately related to market capitalization, which many new issuers overlook when considering how best to build a long-term shareholder base.  We have seen many smaller issuers in their excitement to go public forget their responsibility to build that shareholder base.  They may issue shares that result in their companies being squarely in the microcap realm, and worse yet, because they are only issuing a small minority of shares to the public their float may only be $10-20 million.  This makes it nearly impossible for institutions to take a position as many have minimum investment positions of $5 million or more.  Few fund managers could be convinced to take a position that may amount to a quarter to half of the public float, and even more concerning, more than 5% of the outstanding shares requiring the filing of a Form 13. 

Strengthening Investor Relations

Robust investor relations are crucial for long-term success following an IPO. Effective communication and maintaining transparency with investors are vital for building trust and credibility. Regular updates on company performance, strategic directions, and insights into market opportunities are essential for sustaining investor interest and support during market fluctuations and beyond.  This also entails a willingness to go beyond the regulatory requirements and working with your IR team to provide the intelligence that investors demand.  For new foreign public issuers listing in the U.S., financial results are only required semiannually, but the best issuers will go beyond this requirement and provide quarterly results or at least quarterly operational updates.  Management must also make the commitment to invest in IR through their time and expertise.  As a new public company CEO or CFO, you must be prepared to present a compelling investment thesis to your current and prospective shareholders while also running your business. This help creates a better awareness and understanding of your company among the investor community,   

Lambert by LLYC’s Dedicated Approach

Lambert by LLYC takes a hands-on approach to guiding companies through the IPO process, combining deep knowledge with strategic market expertise. With a team comprising experts from both buy-side and sell-side backgrounds, as well as experienced finance professionals and regulatory specialists, we offer tailored guidance based on years of experience across various markets. 

We craft comprehensive investor relations strategies by leveraging our network of sell side analysts and direct connections with investors and buy side firms. Our advanced technology ensures communication and data management. Moreover, Lambert by LLYC excels in organizing investor relations events like investor days and non-deal roadshows (NDRs) which play a role in fostering trust among investors during pivotal moments. 

Achieving Tangible Outcomes

Lambert by LLYC’s approach to IPO management consistently achieves superior outcomes. Our clients often surpass their market capitalization goals, gaining strategic advantages that enhance their visibility and credibility in the competitive U.S. markets. These successes contribute to our clients’ long-term growth.  

Launching a successful IPO in the U.S. requires more than meeting basic requirements; it demands a partner who understands market intricacies and pushes you to think strategically. For a tailored strategy that sets you up for sustained success on U.S. exchanges, contact Lambert by LLYC today.