Page 137 - Initial Public Offering - An Introduction to IPO on Wall Street

 Listing Fees
 New Board of Directors’ Costs
 Costs of Restructuring

Costs to Be Distributed Between the Two Methods:

 Consultancy Fees
 Auditor Fees
 Legal Fees

The mission of going public is critical and warrants an equally important review of costs. The
data provided here will help you decide a dollar figure to use when you consider the advantages
and drawbacks of taking your business publicly. Recognizing and forecasting the costs once
you’ve planned to file for an IPO will help guarantee your business’s long-term success in the
coming months and years.

7. Timing
Your organization has already taken the decision to file for an IPO and is ready to do so but
you awaiting the right moment to make your move—you’re not alone. Market timing is a
significant concern for most pre-IPO firms, as millions of dollars in financing could be at risk.
According to a Deloitte study, when contemplating an IPO, about one-third of businesses see
17
market timing as the top problem .
Due to the anxiety around IPO timing, businesses often search for market "windows" during
which a public offering has a greater chance of optimizing the business’s value. Considerations
that can help you find open market windows will be discussed in this section: the Volatility
Index, industry competitiveness, and the results of your industry's recent IPOs. Then, based on
this information, useful advice on timing your IPO will be provided before listing the 6 signs
you are ready to go public.

7.1 Considerations for Identifying ‘Open’ Market Windows
The following are most considerations for identifying market windows during which a public
offering has a greater chance of optimizing your business’s value

7.1.1 Volatility Index
The CBOE Volatility Index (VIX), which tracks investors' expectations of volatility in the S&P
500 for the next thirty days, is one of the best indicators of an open IPO window. The VIX is
often alluded to as “the fear gauge” or “the fear index” because it estimates investor anxiety.

17 https://www2.deloitte.com/content/dam/Deloitte/us/Documents/audit/us-audit-private-company-ipos-is-
timing-everything.pdf

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