Page 161 - Initial Public Offering - An Introduction to IPO on Wall Street

An organization has already agreed to go public when it comes to the IPO process by
distributing a proportion of its stock to investment banks as underwriters of the offering. This
way the organization could potentially extend its business to the entire world of possibilities.

This can be an opportunity for the company to expand by going public, and it is necessary to
perform due diligence before the public offering begins for the same reason.

The IPO is a great opportunity not just for the business that sells its shares, but also for potential
investors. This process is sometimes described as the new star in the public sector of the
business. It is typically realized through investment banks that must also monitor due diligence
and its progression before the decision to buy the shares of the company is made.

A possibility of winning big is also provided by a dosage of protection by going public as this
is the first time many businesses will reveal sensitive information and data for analysis.
However, the entire IPO process may be aborted by some form of operational faults or
unforeseen business challenges. There performing proper IPO due-diligence is critical.

9.1.2 People Involved in IPO Due-Diligence
There will be more individuals and service providers other than bankers that will be part of
IPO due diligence and the IPO process. In this whole process, the legal representative of the
company has a significant role and will be included in the due diligence process.
Attorneys ensure that the whole process is carried out in compliance with the law and will also
discuss all relevant regulatory criteria with company representatives. The IPO team will also
collaborate with a financial printer who will provide the required prospects for the initiation of
Due Diligence and IPO. The role of a financial printer in an IPO is already covered in this book.

9.2. The IPO Due-Diligence Process
IPO due diligence reflects on both the applicant business's enforcement and reputational track
record. The due diligence method is one of the most critical factors in a successful IPO. It is
the process that makes it possible for you to justify everything you claim in your prospectus.

From the viewpoint of both a business and investors, this implies credibility and increases the
likelihood of a successful IPO. The importance of IPO due diligence is clear but how does it
work?

During IPO due diligence, the business, its underwriters, and their lawyers will concentrate

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