Page 84 - Initial Public Offering - An Introduction to IPO on Wall Street

Usually, the all-hands or corporate session is a full day of events that includes the following:

Introduction of the working group—This group consists of high-level business executives,
general counsel, external auditor, chief or coordinating underwriters, advocates for
underwriters, experts on financial markets and all other experts employed by the organization
to serve as independent advisors to the business as the IPO process advances and concerns or
queries arise.

Procedurally, this group will oversee or assign all issues related to the impending IPO. The
finalized list of working group members, with contact details, is prepared and circulated
because of the shortened timeline of the IPO process and the hectic schedules of all concerned
parties. Lastly, the confidential existence of the negotiations is made clear to all the parties.

Discussions about the offering—This is lengthy and thorough. Details related to the following
is covered by it:

 The minimal size and make-up of the offer in terms of the principal versus secondary shares
offered;
 The pricing range to target and whether a pre-IPO stock division is needed to bring the
business’s share price into the pricing range being targeted;
 Fees and costs that must be borne;
 The utilization of the earnings;
 Allocation of the shares
 Acceptance of a time of 'lock-up'
 Early holders' registry privileges, particularly venture capitalists who may wish to cash out
during an IPO or soon afterwards; and
 Driven share programs in which selected individuals are assigned shares during the IPO
and may purchase them at the price of the IPO

Time and Responsibility Schedules—Such weekly plans include significant business
activities, workgroup members' scheduling disputes, and a week-by-week list of tasks and
commitments for meetings.

Performing Due Diligence

During the planning process for the registration statement, the whole IPO team will carry out
the required steps to provide a sense of confidence that no relevant false or deceptive
information is included in the registration statement as of the issue date and that no material
information has been left out. These processes are known as due diligence and are carried out
mainly in response to the 1933 Securities Act (1933 Act), which makes all participants in the
registration responsible for any material misrepresentations or oversights in the registration
declaration. In any cases filed against the parties, other than the issuer, under this provision of
the 1933 Act, due diligence acts as the principal defense.

Due diligence practices include the lawyers and underwriters of a corporation reviewing a
corporation and its executives, including, but not limited to, inspecting facility locations;
reviewing important contracts or agreements, financial records, tax reports and meeting
minutes of shareholders and the board of directors; and carrying out numerous evaluations of
the company and the market in which it works. Due diligence also includes reading the full
statement of registration by all parties participating in its preparation to ensure that no material
errors, oversights or contradictions are present.

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