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Inside SEC reporting: Capital formation · PwC's accounting podcast

• 0:00
  SPEAKER_01: Thought Leadership from PWC's National Office.
• 0:07
  SPEAKER_02: Hi, welcome to PWC's Accounting Podcast.
• 0:10
  SPEAKER_02: I'm Kyle Moffitt, PWC's professional practice leader, and your guest host for this SEC focused series.
• 0:17
  SPEAKER_02: If you're just joining us, the goal of this series is to keep you up to speed on the SEC landscape and take a back-to-basics look at key areas of SEC reporting.
• 0:27
  SPEAKER_02: Don't let back to basics fool you, though.
• 0:29
  SPEAKER_02: Speaking from my role in the national office, I can tell you that these are topics that come up almost daily in conversations with clients and engagement teams.
• 0:37
  SPEAKER_02: So whether you're new or experienced, there's something here for everyone.
• 0:41
  SPEAKER_02: A quick reminder: this is also a video podcast series.
• 0:44
  SPEAKER_02: If you're listening to the audio only version and want to watch the video, just head to the show notes for the link.
• 0:50
  SPEAKER_02: Today we're talking all things capital raising, from types of filings to the reporting requirements.
• 0:55
  SPEAKER_02: We break it down and share key insights and reminders.
• 0:59
  SPEAKER_02: I'm joined by Ryan Spencer, a national office partner specializing in SEC financial reporting, and Mike Bellin, PWC's US IPO leader in our capital markets practice.
• 1:09
  SPEAKER_02: Welcome to you both.
• 1:10
  SPEAKER_02: Thank you so much for being here.
• 1:11
  SPEAKER_02: Mike, I first want to start with you.
• 1:13
  SPEAKER_02: Talk a little bit about the landscape, what we're dealing with, you know, the capital raising uh market.
• 1:18
  SPEAKER_02: What's going on today?
• 1:19
  SPEAKER_03: Yeah.
• 1:20
  SPEAKER_03: When I think about capital raising the landscape, I think about the evolution of a company from early stage startup as they scale out of their garage into Main Street to Wall Street.
• 1:30
  SPEAKER_03: The typical capital raising process follows that runway.
• 1:33
  SPEAKER_03: Companies typically look at early seed stage or growth equity capital early on, ultimately to an exit down the road.
• 1:41
  SPEAKER_03: When we think about the early stage capital, the SEC affords unregistered exempt offerings where companies typically follow reg D, crowdfunding, safes, et cetera, to raise capital in those markets.
• 1:53
  SPEAKER_03: And what we're seeing is venture capital.
• 1:55
  SPEAKER_03: And venture capital plays a heavy role in that early stage funding.
• 1:58
  SPEAKER_03: We look at venture capital funding today.
• 2:00
  SPEAKER_03: It's down 15% year on year.
• 2:02
  SPEAKER_03: So a reflection of the times that we're sitting in, a very complex market.
• 2:08
  SPEAKER_03: Dynamics are changing daily, valuations are being pressured.
• 2:12
  SPEAKER_03: When the companies grow, they look to exit, where we're gonna spend most of today's conversation on S1s and capital raising.
• 2:20
  SPEAKER_03: But there we're seeing about 15 IPOs this year, 15 IPOs year on year from last year.
• 2:26
  SPEAKER_03: Capital raise 8 billion versus 6.5 billion.
• 2:29
  SPEAKER_03: So, all in all, a good start to the year.
• 2:32
  SPEAKER_03: But as I said, we're in a dynamic market.
• 2:34
  SPEAKER_03: Things change quickly.
• 2:35
  SPEAKER_03: I would say, you know, as we're thinking about the pipeline, there's a long list of companies looking to exit when the time is right.
• 2:42
  SPEAKER_03: So we'll talk a lot around that S1 process, what that means as companies thinking about exits today.
• 2:47
  SPEAKER_02: Well, and we have seen a few companies pause their IPOs.
• 2:51
  SPEAKER_02: Um, and typically that that tends to happen when you do have kind of uncertain times with everything going on with the Trump administration, the tariffs.
• 2:58
  SPEAKER_02: Um, but just kind of get your perspective.
• 3:00
  SPEAKER_02: I you know, obviously, I think when we think about, you know, the broader environment, people really are thinking about IPOs.
• 3:07
  SPEAKER_02: That that's that's kind of what people are most interested in, right?
• 3:10
  SPEAKER_02: It's the opportunity for investors to get in on a company.
• 3:13
  SPEAKER_02: And so they're obviously always following those.
• 3:15
  SPEAKER_02: So you talk about what we're seeing there.
• 3:16
  SPEAKER_03: Yeah, I think companies that have exited in the pipeline, I would say it's very large-scale companies, companies with large revenue, strong year-on-year growth, showing the right metrics.
• 3:27
  SPEAKER_03: Um, sectors, we're seeing a lot of focus on AI, on infrastructure, life sciences.
• 3:32
  SPEAKER_03: I'd I'd say fintech.
• 3:34
  SPEAKER_03: We're seeing some activity in fintech and even crypto as part of that fintech ecosystem.
• 3:39
  SPEAKER_03: Companies are looking at their key metrics and how those are shaping up next to their public peers, how they can show the growth and value throughout that process.
• 3:47
  SPEAKER_03: Um, I will say one of the themes we're seeing as well is the role of anchor investors in these IPOs, where you get a significant name attaching themselves to an IPO.
• 3:57
  SPEAKER_03: It really gives credence to the other investors that um the company is doing really well in their sector, in their space when you have a well-known investor take a pretty significant position there.
• 4:07
  SPEAKER_03: Um, we're seeing companies move away from overly aggressive projections, forecasts as they're thinking about their earnings outlook.
• 4:14
  SPEAKER_03: And that really helps with the valuation that we're seeing pressured in in recent periods.
• 4:18
  SPEAKER_03: Yeah.
• 4:19
  SPEAKER_02: Yeah.
• 4:20
  SPEAKER_02: Well, thanks for that.
• 4:20
  SPEAKER_02: I mean, I look, I think this is an area obviously the new administration is going to look at, right?
• 4:25
  SPEAKER_02: And anytime we see, you know, a Republican administration, the last uh Trump administration was heavily focused on capital formation um initiatives.
• 4:34
  SPEAKER_02: And so I think we will see a heightened focus on it.
• 4:36
  SPEAKER_02: Um the real question being though, I and I I think you kind of alluded to this, is what's the carrot right now, or even at all, for a company to go public, especially considering the money that can be raised and accessed in the private markets.
• 4:48
  SPEAKER_02: Um, Ryan, can you talk, though, a little bit about maybe, you know, what companies should be thinking about as they're considering um, you know, current commission disclosures when evaluat whether they want to become a public company or not?
• 5:00
  SPEAKER_02: What should they be thinking about?
• 5:02
  SPEAKER_02: What would be some things that might be a little bit more challenging than maybe what they're used to as a private company?
• 5:08
  SPEAKER_04: Sure.
• 5:08
  SPEAKER_04: Um I could talk about that for a little bit.
• 5:10
  SPEAKER_04: They there's definitely uh a number of things that companies are looking at when they're evaluating that cost benefit of becoming a public company.
• 5:17
  SPEAKER_04: Um, obviously, once you become a public company, there's there's some of the obvious ones, right?
• 5:21
  SPEAKER_04: You have to deal with your quarterly reporting and your annual reporting at a cadence that you historically uh haven't had to.
• 5:29
  SPEAKER_04: So that means, you know, depending on your size, you got to do your annual report within 60 to 90 days.
• 5:35
  SPEAKER_04: You got to report your 10Q within 40 to 45 days.
• 5:39
  SPEAKER_04: And then you also now are subject to the form AK requirements, which generally means within four, four business days of a material of uh certain material events, you're gonna be required to disclose them.
• 5:51
  SPEAKER_04: Cybersecurity is one that that comes to mind.
• 5:53
  SPEAKER_04: And there's a number of other different uh 8K requirements.
• 5:57
  SPEAKER_04: So those are just the ones that come inherently with the reporting structure you have as a public company.
• 6:02
  SPEAKER_02: Yeah, I think that's a good point, right?
• 6:03
  SPEAKER_02: As you think about like the 8K that, you know, you're disclosing material events that are occurring in between periods, right?
• 6:12
  SPEAKER_02: Like in between your filings.
• 6:13
  SPEAKER_02: And so if they're on a quarterly cadence, right, you you still need to get information out to the market.
• 6:18
  SPEAKER_02: So you're certainly subject to that constant, like, you know, news um press, right?
• 6:24
  SPEAKER_02: So every you know, obviously analysts are gonna be always focused on it.
• 6:26
  SPEAKER_02: And I think um in any material event, right?
• 6:29
  SPEAKER_02: Like beyond cybersecurity, if you have a material event that occurs, then you have to disclose it in a form AK unless you're getting ready to file like a Q or a K, but it's complex.
• 6:37
  SPEAKER_04: So you you you'll need the disclosure controls and procedures to be able to do that on a timely basis.
• 6:42
  SPEAKER_04: So that that's one thing.
• 6:43
  SPEAKER_04: Just I'll just call it the infrastructure.
• 6:45
  SPEAKER_04: That's one thing that that that companies are definitely spent a lot of time thinking about.
• 6:50
  SPEAKER_04: More recently, though, there's other disclosures that have that have crept into the SEC regulations.
• 6:55
  SPEAKER_04: Um, there's I mentioned cybersecurity on an AK.
• 6:59
  SPEAKER_04: There's also annual uh cybersecurity-related disclosures around governance, risk management that are required.
• 7:05
  SPEAKER_04: There's also rules around clawback that came into play recently, uh, which is uh recovery of erroneously awarded compensation and some of the policies and rules that go along with that.
• 7:15
  SPEAKER_04: There was insider trading.
• 7:17
  SPEAKER_04: There was also a pretty substantial climate rule, which I we all know at this point.
• 7:21
  SPEAKER_02: Talk about a little bit, I think.
• 7:23
  SPEAKER_04: Yeah, we certainly have there's we've talked about it in many, many different podcasts, but that that is something that right now is held up in the courts.
• 7:31
  SPEAKER_04: The SEC has has obvious uh has voted recently to withdraw their defense of it.
• 7:37
  SPEAKER_04: So um we'll have to see how that plays out.
• 7:39
  SPEAKER_04: But that's something that I don't think companies are thinking too much about right now when they're going public, given this the state of state of affairs there.
• 7:47
  SPEAKER_04: Right.
• 7:48
  SPEAKER_04: There's also with that, with everything going on in the world around cybersecurity and a uh artificial intelligence risk factors, there's just a number of disclosure things that that need to be considered beyond what companies were considering, say, four years ago.
• 8:02
  SPEAKER_02: Yeah.
• 8:02
  SPEAKER_02: No, I think it's important.
• 8:03
  SPEAKER_02: Like you think about just the risk factors themselves, just grounding the the requirements really focused on like it's the risk of investing in a security, invest risk of investing in a company.
• 8:13
  SPEAKER_02: Like there, there's a lot to them.
• 8:15
  SPEAKER_02: And so you are like, I'm glad you brought up kind of the AI point, the, you know, the the cybersecurity obviously has been a big focus.
• 8:22
  SPEAKER_04: There is there is one.
• 8:23
  SPEAKER_04: Sorry, Kyle.
• 8:24
  SPEAKER_04: I mean, there's one that I that I failed to mention, but I wanted to save it for last, and that is the Sarbanes Oxley 404 requirements.
• 8:30
  SPEAKER_04: Oh, yeah.
• 8:31
  SPEAKER_02: That's a great point.
• 8:32
  SPEAKER_04: So uh most of the focus there uh tends to be on the auditor attestation requirements uh for internal controls, and we'll we'll talk about that a little bit more later.
• 8:41
  SPEAKER_04: But um there's also uh uh the requirement that in the comp in a company's uh second annual report, they're going to need the management will need to attest to internal controls as well.
• 8:52
  SPEAKER_04: So it's not just the auditor requirement, it's the it's the it's the uh management requirement as well that comes into the play.
• 8:59
  SPEAKER_04: And that can that can affect the cost structure of a of an entity as well.
• 9:02
  SPEAKER_04: So that's something that that uh companies give a lot of thought to.
• 9:05
  SPEAKER_02: I think it's that's a great point because it when I think about just those disclosures, even thinking about like the risk factors in a registration statement, what we've seen, the trend has been companies disclosing if they do have material weaknesses, just hey, we're gonna get that out there so an investor knows what they're getting into.
• 9:21
  SPEAKER_02: It's almost like a pre-warning, right?
• 9:23
  SPEAKER_02: For down the road, you know, hopefully management in a position to actually step into that and actually do the assessment and have a clean one.
• 9:31
  SPEAKER_02: Um, but again, I think that's that's always been an issue that people have been challenged by.
• 9:34
  SPEAKER_02: And I guess that kind of leads me to this, to the follow-up question on a lot of rumblings we've heard, because you mentioned 404.
• 9:41
  SPEAKER_02: And I think that's always been a topic of conversation with different administrations and how involved it is, at least kind of the the audit piece of assessing internal controls over financial reporting.
• 9:53
  SPEAKER_02: So I think we have heard rumblings that there could be some actions, right, to reduce certain disclosure requirements, simplifying disclosures, right?
• 10:01
  SPEAKER_02: And so that you know, companies with a certain size may have scaled reporting.
• 10:05
  SPEAKER_02: Um, and there has been, and we were talking about this prior to this, you know, prepping for this is there's there's you know bills that are floated constantly by folks on the hill aimed at some of these initiatives.
• 10:15
  SPEAKER_02: But what I want you to do is ground it in what's what can companies do today?
• 10:19
  SPEAKER_02: So what are the accommodations today that apply for a company if they want to actually raise capital?
• 10:24
  SPEAKER_04: Yeah, sure.
• 10:25
  SPEAKER_04: So let's level set a little bit.
• 10:27
  SPEAKER_04: So uh about 13 years ago, there was a uh a law passed called the Jumpstart Our Startups Act of 2012.
• 10:34
  SPEAKER_04: And in that, so it's been around for a while, but in that it established a group of companies or a different file or status uh called emerging growth companies.
• 10:43
  SPEAKER_04: And the purpose of this bill really was to really get and and allow or provide a mechanism for smaller companies to be able to raise capital.
• 10:54
  SPEAKER_04: So not only at the private level was there some legislation, but also uh for companies that are thinking about going public.
• 11:00
  SPEAKER_04: So they established a group of filers called emerging growth companies.
• 11:04
  SPEAKER_04: Uh, and and it's the bulk of IPOs we see are what we will call EGCs.
• 11:09
  SPEAKER_04: And the accommodations there that uh EGCs are provided, there's a handful of them, but I'll focus on a couple that are the most significant.
• 11:15
  SPEAKER_04: And that is in the IPO, an EGC will have re can have or take advantage of reduced financial reporting requirements.
• 11:23
  SPEAKER_04: So they they can only provide two years of audited financials, where non-EGCs will need to provide three years of financial statements.
• 11:32
  SPEAKER_04: And then uh potentially more importantly, I'd say, is what I just talked about, and that's the auditor attestation requirements of internal controls.
• 11:41
  SPEAKER_04: Uh typically a company, a non-EGC, would be required to have the auditor uh generally have the auditor attestation in their second annual report.
• 11:51
  SPEAKER_04: But as an EGC, as assuming you maintain your status as an EGC for five years after the IPO, you could take advantage of that for up uh up to five years.
• 12:01
  SPEAKER_04: Um, and people often ask, well, what is an EGC?
• 12:05
  SPEAKER_04: It originally started in the in the in the law with a if you had revenues over a billion dollars, you couldn't qualify.
• 12:13
  SPEAKER_04: They've moved that up for for inflation reasons over the past handful of years.
• 12:18
  SPEAKER_04: So now it's a revenue threshold of$1.235 billion.
• 12:22
  SPEAKER_04: So if you're below that, that's one of the criteria you can meet uh that you can qualify as an EGC.
• 12:28
  SPEAKER_04: There are other criteria.
• 12:30
  SPEAKER_04: Once you become a public company, you can maintain that status up to five years as long as you don't uh what I'd say no longer are an emerging growth company, but are a real growth company.
• 12:41
  SPEAKER_04: And maybe you're a large accelerated filer, your market cap has gone up at that point in time, you'd have to transition out of um EGC status.
• 12:49
  SPEAKER_04: Um, there's also uh reduced executive compensation types of disclosures.
• 12:54
  SPEAKER_04: Uh, it's a reduced level that needs to be in the in the IPO registration statement.
• 12:58
  SPEAKER_04: So I think when we see EGCs and and the what they can take advantage of there, I think that's one one thing that uh a lot of companies look at as reduced reduced burden there.
• 13:08
  SPEAKER_04: You mentioned um some of the legislation or what what we might see in that area uh or changes to regulation.
• 13:15
  SPEAKER_04: Uh there has been some talk.
• 13:18
  SPEAKER_04: Uh the acting chair of the SEC, Mark Ueda, uh in in February of 2025, mentioned at a various conferences that this is one thing they're looking at.
• 13:28
  SPEAKER_04: They were actually looking at whether or not uh maybe should they allow adjust the regulation to allow more companies to qualify as an EGC?
• 13:37
  SPEAKER_04: Or once you do, perhaps that off-ramp is longer than 10 years.
• 13:41
  SPEAKER_04: Yes.
• 13:41
  SPEAKER_02: And we have and we've seen a bill.
• 13:42
  SPEAKER_02: I've seen a bill, that or you know, a draft bill that you know things get floated around, you hear rumblings, and 10 years is is you know, is what people talk about.
• 13:51
  SPEAKER_02: So I think obviously that would have a huge, that would have a huge impact.
• 13:54
  SPEAKER_02: I guess I'm gonna pause you there and ask you, Mike, do you think that it do you think that the Jobs Act worked?
• 14:00
  SPEAKER_02: Do you think that it it was enough of a character, or do you think more needs to be done moving forward?
• 14:05
  SPEAKER_02: I know it's a loaded question, but you know, what needs to be done moving forward?
• 14:09
  SPEAKER_03: Yeah, 100%.
• 14:10
  SPEAKER_03: I think it was a very effective um way to increase capital allocation in the US and capital formation in the U.S.
• 14:17
  SPEAKER_03: You look at our registrants today, 90% of them are EGCs.
• 14:21
  SPEAKER_03: So I think it's been very effective to use the accommodations that Ryan mentioned as an easier way, a quicker way, a cheaper way to get to market and raise public capital.
• 14:31
  SPEAKER_03: If the SEC does change some of the rules and some of the thresholds, et cetera, I do think it'll encourage companies to further look at the public markets.
• 14:40
  SPEAKER_03: 10 years being at EGC, that's a big difference when you think about the resources and the time required to do a SOX 404B at testation.
• 14:49
  SPEAKER_03: Um, that'll really be a big leverage for companies to use.
• 14:53
  SPEAKER_03: Yeah.
• 14:53
  SPEAKER_03: I agree.
• 14:54
  SPEAKER_02: Any anything else to add there?
• 14:56
  SPEAKER_02: Um look, I think, I do think, and I'm glad you you mentioned kind of what we've heard from the acting chair, uh Mark Uin.
• 15:03
  SPEAKER_02: I think it's important because you know he he was previously on the staff.
• 15:08
  SPEAKER_02: He he was a counsel to the incoming uh chair um once confirmed by the Senate, Paul Atkins.
• 15:14
  SPEAKER_02: And I think we'll we're gonna see a lot of these initiatives, I think, uh start start to take hold.
• 15:19
  SPEAKER_02: Ryan, any I'll stick with you for a minute here.
• 15:21
  SPEAKER_02: Anything from an accounting perspective a company needs to be thinking about.
• 15:25
  SPEAKER_04: Yeah, so as a company is transitioning from a private company to a public company, and in the IPO document, um there are a few gap-related items they'll need to consider.
• 15:35
  SPEAKER_04: The the first is um, and and I'm not gonna go through them all, but I think it's important to you know talk to your auditors, talk to your advisors to make sure you kind of have those all on the table for consideration.
• 15:44
  SPEAKER_04: But um, one of the more obvious ones is uh the SEC's regulation SX has specific financial statement disclosure requirements either in the notes or on the face of the financial statements.
• 15:56
  SPEAKER_04: So a couple quick examples of that is regulation SX calls for uh additional disclosures around equity method investments.
• 16:03
  SPEAKER_04: If you have equity method investments, uh they require a, in some cases, a greater disaggregation of uh revenue on the on the face of the income statement.
• 16:15
  SPEAKER_04: And there's a there's a whole host of others, but those are some uh some of the few that come to mind just in regulation SX.
• 16:21
  SPEAKER_04: Beyond that, in just core gap, there's also requirements that are different for private companies versus public companies.
• 16:28
  SPEAKER_04: So one area is segment reporting.
• 16:30
  SPEAKER_04: So you didn't have to do that as a private company, as a public company.
• 16:34
  SPEAKER_04: Um, you are required to have segment-related disclosures, which recently were, I'll call it, uplifted to uh cause and require additional disclosures at a more granular level, specifically significant expense categories for each of the segments.
• 16:50
  SPEAKER_04: So with that comes um a little bit more of a compliance effort.
• 16:54
  SPEAKER_04: Uh earnings per share, obviously, is something that'll need to be done.
• 16:57
  SPEAKER_04: And then there's uh a number of other areas within GAAP that require different disclosures for public companies.
• 17:03
  SPEAKER_04: So think um income taxes, the income tax rate reconciliation, as well as revenue, certain revenue recognition disclosures as well.
• 17:11
  SPEAKER_02: Those are great points.
• 17:12
  SPEAKER_02: And I think one of the I think challenges a lot of companies face when when preparing financial statement and dealing with it, right, is there's also the ongoing impact or the impact of outside of the filing, right?
• 17:23
  SPEAKER_02: So you think about mDNA, and so all this granular level of detail, like you can't really look at, let's say, someone's IPO last year or the year before and say, hey, let's just kind of mock up our MDNA similar to that, because the segment disclosures are gonna require a lot of detail.
• 17:38
  SPEAKER_02: And so I think the SEC is probably gonna expect to see that detail transit get transition over to MDNA to see good descriptions of that granular information.
• 17:46
  SPEAKER_02: So um, so Mike, I want to turn to you and just ask you a high-level overview of the process involved in an IPO.
• 17:55
  SPEAKER_03: Yep.
• 17:55
  SPEAKER_03: And I'll start with the form we're talking about, form S1.
• 17:58
  SPEAKER_03: It's a form that's used by US domestic companies who are issuing public equity for the first time.
• 18:04
  SPEAKER_03: And everything that I speak about here is predicated on what I focus on is the prep.
• 18:09
  SPEAKER_03: Getting to the stage where you're drafting an S1 requires a lot of prep.
• 18:12
  SPEAKER_03: The all the financial statement issues that Ryan just walked us through, that takes several months, if not longer, um, years, et cetera, to get there.
• 18:21
  SPEAKER_03: Companies, so when they draft the S1 with their working group, they typically submit it to the SEC confidentially.
• 18:27
  SPEAKER_03: Um, the Jobs Act allows issuers to issue their S1s on a confidential basis.
• 18:33
  SPEAKER_03: You can stay in confidential status for as long as you want until it's time to really hit the road, hit the road on your road show there.
• 18:39
  SPEAKER_03: So companies typically go three to four rounds uh of filings with the SEC on a confidential basis.
• 18:46
  SPEAKER_03: The SEC reviews the document.
• 18:48
  SPEAKER_03: Um, the first turn that the SEC gets typically takes 30-ish days to review.
• 18:53
  SPEAKER_03: We always get the questions can you accelerate that?
• 18:55
  SPEAKER_03: Can I do two weeks?
• 18:56
  SPEAKER_03: I'm in a real hurry to get my IPO out.
• 18:58
  SPEAKER_03: Doesn't happen.
• 18:59
  SPEAKER_03: SEC will do a very thorough review of the document.
• 19:02
  SPEAKER_03: They'll look at the entire document, they'll look at the business section, the legal risk factors, they'll look at the MDNA, they'll look at the F pages in the back, which are the financial statements, and ask a host of questions around those areas.
• 19:14
  SPEAKER_03: You'll you'll digest those, you'll update the document, maybe need to drop it in a new period.
• 19:18
  SPEAKER_03: You have to keep your S1 from going stale.
• 19:22
  SPEAKER_03: So once one quarter goes stale, you have to drop in the subsequent quarter.
• 19:27
  SPEAKER_03: And that's the challenge that Ryan mentioned about being public is this cadence that you have to be on to refresh your statements, get through reviews, um, et cetera, to be ready for that.
• 19:35
  SPEAKER_02: And typically the SEC just will, and as I can speak to experience here, the SEC is not going to review a stale registration statement, right?
• 19:43
  SPEAKER_02: And so it's kind of a non-starter for in almost every instance.
• 19:46
  SPEAKER_02: So I think that's a great point, is like you got to be ready to meet that cadence of reporting.
• 19:52
  SPEAKER_02: Yep.
• 19:52
  SPEAKER_02: Um, because especially too, once you go public, you better be ready to do it on a quarterly basis.
• 19:56
  SPEAKER_02: Yeah, that's right.
• 19:57
  SPEAKER_04: I mean, there's certain disclosures that uh main may, by their nature, be incomplete in some of the draft uh registration statements.
• 20:05
  SPEAKER_04: However, as it comes to the financial statements, to your point, the SEC will generally not review them unless you have met the requirements.
• 20:12
  SPEAKER_04: We'll talk a little bit more about that in a bit.
• 20:14
  SPEAKER_03: So I said SEC typically takes three to four rounds of comments um, of updating the document.
• 20:20
  SPEAKER_03: Um, but once you respond to that, you're updating your S1, constantly refreshing that.
• 20:24
  SPEAKER_03: And at the right time, when you're ready, when the market's ready, you have to flip your document publicly.
• 20:30
  SPEAKER_03: You have to show it the spotlight of the public audience out there for 15 days prior to the start of your roadshow.
• 20:37
  SPEAKER_03: That way the public investors can digest the document, they can read the document, et cetera.
• 20:41
  SPEAKER_03: After 15 days, um, your bankers will take you on what they call the roadshow.
• 20:46
  SPEAKER_03: It's typically a week, plus or minus a few days.
• 20:49
  SPEAKER_03: Can be done over Zoom, can be done in physical presence, but you're meeting with buy-side investors to tell your story, to tell why they shouldn't put a dollar into your company versus another company.
• 20:59
  SPEAKER_02: What are most doing?
• 21:00
  SPEAKER_02: Do they do Zoom or do they do it first?
• 21:03
  SPEAKER_03: Zoom was very popular during the pandemic.
• 21:05
  SPEAKER_03: Right, now we're back.
• 21:06
  SPEAKER_03: I think it's stuck around.
• 21:07
  SPEAKER_03: Oh, it has.
• 21:07
  SPEAKER_03: Well, I think it's stuck around for the most part.
• 21:09
  SPEAKER_03: Interesting.
• 21:09
  SPEAKER_03: We are seeing some significant meetings being done in person, but Zoom's an efficient way to get a wide audience.
• 21:16
  SPEAKER_03: Um, so you're you're going through that roadshow, you you price your IPO.
• 21:20
  SPEAKER_03: Um, once you do that, you're updating your document throughout for price ranges.
• 21:24
  SPEAKER_03: So you start with a range of call it 15 to 17.
• 21:29
  SPEAKER_03: Um, you say you're going to go out at 18.
• 21:31
  SPEAKER_03: You had a really good roadshow.
• 21:33
  SPEAKER_03: You update the document for that, you refresh some of the pro form information, et cetera.
• 21:37
  SPEAKER_03: The SEC declares your document, what we say effective, and you're you have the ability to price and issue your IPO.
• 21:44
  SPEAKER_03: Um, so that process start to finish from your initial filing with the SEC to when you're ringing the bell can be anywhere on average, absent market fluctuations, five to six months is typically what we see.
• 21:57
  SPEAKER_03: Yeah.
• 21:57
  SPEAKER_03: Can you get out quicker?
• 21:58
  SPEAKER_03: You can, but it goes back.
• 22:00
  SPEAKER_03: To the readiness and the prep to have those audits done, to have the reviews done, to have your document and really have the maturity around the organization to be ready to be public.
• 22:08
  SPEAKER_02: Yeah, those are all great points.
• 22:09
  SPEAKER_02: And I think it's just thinking about the complexity, right?
• 22:13
  SPEAKER_02: There's also complexity, Mike, in the process, right?
• 22:15
  SPEAKER_02: Of the registration statement and prospectus.
• 22:18
  SPEAKER_02: Can you talk a little bit about how that all comes together?
• 22:20
  SPEAKER_03: Yeah, the document is not just an accounting document.
• 22:23
  SPEAKER_03: We're all CPAs here, but it's a legal document.
• 22:26
  SPEAKER_03: It's a marking document.
• 22:27
  SPEAKER_03: It's a financial statement document.
• 22:28
  SPEAKER_03: And you think about the key parts of that S1.
• 22:31
  SPEAKER_03: Um, you have the prospectus or what we call the box.
• 22:34
  SPEAKER_03: That's where the majority of time is being spent by a management team really telling their story, disclosing key financial operating metrics, financial metrics, non-gap metrics, uh, to really tell the story of the company.
• 22:47
  SPEAKER_03: You have the risk factors, which we mentioned.
• 22:49
  SPEAKER_03: Um, fact I would say those are risks specific to the business, specific to the industry as a first-time issuer.
• 22:56
  SPEAKER_03: That's a very thorough part of the document.
• 22:58
  SPEAKER_03: Your external legal counsel will typically hold the pen around that and draft it.
• 23:02
  SPEAKER_03: The area that we spend a lot of time on is the MDNA, the management discussion and analysis really tells around what are the true growth factors for the company?
• 23:11
  SPEAKER_03: How the how has the company evolved over a period of time?
• 23:14
  SPEAKER_03: What's driving changes in the financial statements?
• 23:17
  SPEAKER_03: Why is revenue increased?
• 23:18
  SPEAKER_03: Um, what's your debt load look like?
• 23:20
  SPEAKER_03: And how's that liquidity on a go-forward basis?
• 23:23
  SPEAKER_03: As long as some critical accounting policies, what are those accounting policies that are very sensitive to different changes in interest rates?
• 23:31
  SPEAKER_03: Yeah, exactly.
• 23:32
  SPEAKER_03: So it's a very big document.
• 23:34
  SPEAKER_03: Um, the use of proceeds, how are you going to use the proceeds you get?
• 23:37
  SPEAKER_03: Is to pay down debt, is to grow the business, selective financial statements.
• 23:41
  SPEAKER_03: Um, and then in the back, you're gonna have your description of the equity you're issuing, some of the underwriting agreements with the banks.
• 23:47
  SPEAKER_03: But all in all, this is a big document.
• 23:49
  SPEAKER_03: I'd say a short one's 150 pages.
• 23:52
  SPEAKER_03: Typically, we see an access of 300 pages here, excluding exhibits.
• 23:57
  SPEAKER_03: So it's a very thorough document that you know the lawyers, the bankers, and the management team, and us as accountants spend a lot of time really preparing for the SEC.
• 24:05
  SPEAKER_02: Yeah, and at the I think you you got us pointed this right in the right direction of kind of the next step of the financial statement.
• 24:11
  SPEAKER_02: Because as you mentioned, the financial statement should start thinking about financials, proformas, and what needs to be in there.
• 24:16
  SPEAKER_02: And um, I think the the other, I think, piece that that you highlighted, which I think is very important and something that we we often focus on because the staff's focused on at the SEC right now, is non-gap and KPIs.
• 24:27
  SPEAKER_02: And I think my message to to to our clients is always look, you know, make sure that you feel very good about the numbers, the KPIs, the metrics you're reporting, even outside of the file, outside of the uh the financial statements themselves, right?
• 24:40
  SPEAKER_02: And and we know that that analysts, investors are looking at that information and oftentimes relying on that to make an investment decision.
• 24:47
  SPEAKER_02: So that's something to keep in mind is the the rigor, the controls that need to be in place, the processes around the reporting of that information.
• 24:53
  SPEAKER_02: So, Ryan, I'm gonna switch gears and talk to you.
• 24:56
  SPEAKER_02: So, so financial statements.
• 24:58
  SPEAKER_02: Can you talk a little bit about what types of financial statements are are needed?
• 25:02
  SPEAKER_04: Yeah.
• 25:02
  SPEAKER_04: So uh when we're talking about what uh types of financial statements are needed, do I need interim financials?
• 25:08
  SPEAKER_04: What annual financials do I need?
• 25:09
  SPEAKER_04: One of the first things that I do when talking with a team or a company is trying to understand kind of what the end game is.
• 25:17
  SPEAKER_04: Like what is the timeline that you expect?
• 25:19
  SPEAKER_04: Because a lot of what I want to talk about kind of feeds off of that.
• 25:22
  SPEAKER_04: So I mentioned um, I mentioned emerging growth companies earlier and the accommodations they have.
• 25:29
  SPEAKER_04: They do have accommodations in terms of the type uh what financial statements may be needed each time you push the button.
• 25:35
  SPEAKER_04: And when I say push the button, each time you submit a confidential submission, as well as each time you make a public filing, what are the what are the financial statements that are actually needed, right?
• 25:46
  SPEAKER_04: Regulation SX specifically calls based on the date, the age of the financials, it calls for a certain set of financial statements, um, uh audited financial statements, as well as potentially interim financial statements.
• 25:59
  SPEAKER_04: And one of the things that um the the the Jobs Act and a companion act that came out a few years after that, the FAST Act did, is allowed for companies, EGCs and non-EGCs alike, to actually exclude from draft registration statements certain sets of financial statements that won't be needed ultimately as you get to the end game.
• 26:21
  SPEAKER_04: So as an EGC, you can actually exclude financial statement periods that you don't think will be necessary at the time of the contemplated offering.
• 26:30
  SPEAKER_04: A non-EGC actually has the ability to take advantage of this too.
• 26:35
  SPEAKER_04: Rule's just a little different.
• 26:36
  SPEAKER_04: It shifts it out and says, well, it's based on your first public filing, what do you think you'll need?
• 26:41
  SPEAKER_04: So you you start with that, and what that actually results in is there's a number of draft registration statements I need, uh I review for an EGC where an EGC only needs two years of audited financials.
• 26:53
  SPEAKER_04: I'll see a lot of draft registration statements when where there's only one year of financial statements in there.
• 26:58
  SPEAKER_04: It kind of takes the A out of the MD and A a little bit.
• 27:00
  SPEAKER_04: But I but pretty easy to review.
• 27:02
  SPEAKER_04: But we see that, and it won't, and you can also exclude, I think, from a company and a and a financial, just the the whole burden of the process, being able to exclude certain interim financial statements because you'll be lapped by a year or be superseded by a year comes into play quite a bit.
• 27:18
  SPEAKER_04: So uh let's take a an EGC that's filing a calendar EGC that's filing or um submitting a confidential registration statement in December.
• 27:28
  SPEAKER_04: Uh they most likely will be able to exclude financials that otherwise would be required, like interim financial statements for September.
• 27:36
  SPEAKER_04: They'll be able to exclude those, knowing that by the time they get to the offering, that period will be superseded by the annual audited financial statements.
• 27:44
  SPEAKER_04: So that flexibility is definitely something that was an important part of that of that legislation and the regulation.
• 27:51
  SPEAKER_02: Yeah, and I and I I think it highlights too the importance of making sure that the that Securities Council and auditors or whoever is advising is fully engaged on this so that you aren't doing too much work, but you're doing the right amount of work to make sure that you actually can proceed and have your filing reviewed.
• 28:09
  SPEAKER_02: Um but I think that's a great point.
• 28:11
  SPEAKER_04: Precisely.
• 28:12
  SPEAKER_04: I've been on a lot of calls where the a company in that situation says, Oh, I'm gonna do a submission in December, even in EGCs, like I'm gonna do my first public filing in December.
• 28:22
  SPEAKER_04: You you can actually you can actually exclude those interim financial statements.
• 28:25
  SPEAKER_04: If you're an EGC, sometimes it's something that hadn't necessarily been been been talked about.
• 28:29
  SPEAKER_04: So that's a great point.
• 28:30
  SPEAKER_04: That's important.
• 28:31
  SPEAKER_04: Uh we talked about interim financial statements, and we these what we're talking about is the historical financial statements uh for the entity going public.
• 28:39
  SPEAKER_04: There may be other financial statements that are required, though, in the registration statements.
• 28:43
  SPEAKER_04: So not just that of the registrant or its predecessor.
• 28:47
  SPEAKER_04: It could be um financial statements for a uh significant acquisition that has occurred, a probable acquisition that's going to happen.
• 28:56
  SPEAKER_04: Um, and it could also be if you happen to have significant equity method investments, you may be required to have separate financial statements for those equity method investments as well.
• 29:08
  SPEAKER_04: Um that that's that's important because you have to line up all the different players there.
• 29:13
  SPEAKER_04: There might be a different auditor involved, and you have to make sure you go through that process.
• 29:17
  SPEAKER_04: So having a plan early on, those are usually the first questions I ask a team and a company is do you have any of this stuff?
• 29:23
  SPEAKER_02: Because it's it's always a surprise when it's and it can't be.
• 29:27
  SPEAKER_02: I and I think so.
• 29:28
  SPEAKER_02: We will have we will have a future um podcast to cover that as well to get into more detail on it.
• 29:33
  SPEAKER_02: Because I think it's it's very important that you have a full inventory of the financial statements that you need to reflect in your filing.
• 29:40
  SPEAKER_04: That's right.
• 29:41
  SPEAKER_04: And the last thing you may need from a financial statement perspective are unaudited financial statements that are pro-forma financial statements.
• 29:49
  SPEAKER_04: So there's a list of things in Article 11 that may require a pro forma financials when we think about IPOs.
• 29:54
  SPEAKER_04: It could be pro forma for a uh significant uh acquisition that occurred, a probable acquisition.
• 30:02
  SPEAKER_04: You could have uh pro forma financial statements that are that are required there.
• 30:07
  SPEAKER_04: Uh there could also be a situation where you you have maybe a change in the capital structure.
• 30:12
  SPEAKER_04: You're good, you're an LLC, you're gonna actually go out uh as a C Corp.
• 30:17
  SPEAKER_04: We see that a lot.
• 30:18
  SPEAKER_04: There are pro forma for that as well.
• 30:20
  SPEAKER_03: Yeah.
• 30:20
  SPEAKER_03: And I think when you think about those pro forma, one of the um typical disclosures we see along with it is pro forma EPS, pro forma earnings per shares for the change in legal org from an LLC to a C Corp.
• 30:31
  SPEAKER_03: You think about the other changes that are oftentimes effective at an IPO, triggering of um restricted stock units, thinking about preferred shares moving down to permanent capital, et cetera.
• 30:42
  SPEAKER_03: That all impacts EPS.
• 30:44
  SPEAKER_03: So the disclosure of EPS on a pro forma basis is a very commonplace disclosure.
• 30:48
  SPEAKER_04: Substantial majority of S1 filings have some level of pro forma EPS in there, even if you don't need what I'll call full-blown pro forma financial statements.
• 30:57
  SPEAKER_02: Yeah.
• 30:57
  SPEAKER_02: No, that's a I think that's it can be a sleeper issue, certainly.
• 31:01
  SPEAKER_02: Um Brian, anything else?
• 31:03
  SPEAKER_02: I I know comfort letters want to touch a little bit on.
• 31:05
  SPEAKER_02: Do you just want to cover that?
• 31:06
  SPEAKER_04: Yeah, it wouldn't, it wouldn't be a discussion about IPO without comfort letters.
• 31:10
  SPEAKER_04: Uh so the comfort letter is also an important part of the process.
• 31:13
  SPEAKER_04: What is a comfort letter?
• 31:14
  SPEAKER_04: It's a, it's a, it's part of the uh underwriters' due diligence process.
• 31:18
  SPEAKER_04: So underwriters in a 33 act, 1933 act offering have a due diligence requirement uh related to the information contained in the prospectus.
• 31:27
  SPEAKER_04: They um in those instances ask the auditor to do some of some of uh to assist them in performing some of those procedures uh as it relates to financial information that's contained in there.
• 31:39
  SPEAKER_04: So it's a letter that's written from the auditor to the underwriters, help, you know, helping them in that process.
• 31:46
  SPEAKER_04: It it's it's it's a long-standing practice.
• 31:49
  SPEAKER_04: There is an auditing standard on it that actually governs how the auditor should go about doing that.
• 31:55
  SPEAKER_04: Uh, the reason I mention it is because it's very important for that process to be um on the table early.
• 32:02
  SPEAKER_04: Uh, we do often see early drafts, even the ones that are confidentially submitted, will start to see uh the numbers in that document being circled up is what we call it, uh, circled up for the different numbers that they want, uh they may want comfort on so that the parties, the the company, the auditor, and the underwriter and their council have a clear understanding of where this, uh, where this is going to go, which numbers um can be can be um comforted and which ones aren't.
• 32:30
  SPEAKER_04: So doing that early helps avoid those discussions later in the process.
• 32:35
  SPEAKER_04: Yeah.
• 32:36
  SPEAKER_02: No, I think I think like thinking, you know, holistically about the process, I think it kind of pulls me back to you, Mike, and you know, thinking about just being a reporting company, an ongoing public company.
• 32:48
  SPEAKER_02: Um, yeah, talk a little bit about what else you know you talk to clients about when you talk about, hey, it's not just the the before, it's not just the readiness, but it's what you're gonna have to deal with moving forward.
• 32:59
  SPEAKER_03: Yeah, 100%.
• 33:00
  SPEAKER_03: I I think the importance is here, the ability to be public.
• 33:03
  SPEAKER_03: We've been talking a lot about going public, but at the end of the day, you're being a public entity.
• 33:07
  SPEAKER_03: Are you ready to be a public entity?
• 33:09
  SPEAKER_03: And companies need to think about that through people, processes, systems.
• 33:13
  SPEAKER_03: And typically leading up to this process, we've been talking about 12 to 18 months in advance.
• 33:19
  SPEAKER_03: We're supporting clients as they think about public company readiness.
• 33:22
  SPEAKER_03: And it's not just accounting, financial reporting, it's can you close your books on a timely basis to get out these interim financial statements?
• 33:29
  SPEAKER_03: Do you have good visibility to your future forecast?
• 33:32
  SPEAKER_03: The market's going to expect the next eight quarters of you meeting, beating whatever estimates you have.
• 33:38
  SPEAKER_03: Can you do that with some level of precision?
• 33:41
  SPEAKER_03: Have you thought about the right tax structure?
• 33:43
  SPEAKER_03: If you are going from an LLC to a to a C Corp, there's more exotic ways to do that.
• 33:48
  SPEAKER_03: Have you thought about that?
• 33:49
  SPEAKER_03: What about your compensation?
• 33:51
  SPEAKER_03: You know, typically companies that go public suddenly have a unit they can award employees with and compensate employees with.
• 33:58
  SPEAKER_03: What type of plans are you going to put in place?
• 34:00
  SPEAKER_03: That all takes time to do.
• 34:01
  SPEAKER_03: You think about public company governance, recruiting an independent board in today's world, having diversity, thinking about do we have a cyber expert?
• 34:09
  SPEAKER_03: Do we have an AI expert?
• 34:10
  SPEAKER_03: Do we have the right experts on the board?
• 34:12
  SPEAKER_02: That's that's I meant to mention that earlier when you were talking about cyber, and I'm glad you you brought that up.
• 34:16
  SPEAKER_02: I think you're right.
• 34:17
  SPEAKER_02: I mean, I think it's a lot to think about, right?
• 34:19
  SPEAKER_02: Just the governance aspect of being a public company.
• 34:22
  SPEAKER_02: Um, so Mike, you you reflect back on just your experience over the years dealing with, you know, IPOs and reviews of S1s, your work there.
• 34:32
  SPEAKER_02: Um, what are some of the lessons learned?
• 34:34
  SPEAKER_02: Like what's kind of the the best practices?
• 34:36
  SPEAKER_02: Yeah.
• 34:37
  SPEAKER_03: I I think today it's really the importance of crafting your equity story and pressure testing that through testing the waters meetings.
• 34:43
  SPEAKER_03: Um so once you get to the roadshow, you can explain your business to a buy-side investor.
• 34:49
  SPEAKER_03: You can understand, you can explain the growth levers, the metrics, how you compare to your peers, why you're a better company than your peers.
• 34:55
  SPEAKER_03: So I think it really comes down to the growth story or your equity story, and everything around that feeds in.
• 35:00
  SPEAKER_03: So thinking about the risk factors, thinking about what KPIs do you want to disclose.
• 35:05
  SPEAKER_03: Once you disclose your KPIs, you're kind of stuck with those for the next several years as a public company as your sector evolves.
• 35:12
  SPEAKER_03: Maybe you can change them.
• 35:13
  SPEAKER_03: But companies want to think about what are those top five KPIs, operating metrics, non-gap metrics that really help support the equity story there.
• 35:21
  SPEAKER_03: That's key.
• 35:21
  SPEAKER_03: When you when you bring it back to some of the accounting, financial reporting, having a document that is very um symmetric throughout from the front to the back.
• 35:30
  SPEAKER_03: Does that segment disclosure that we spoke about, does that line up to how we're describing the business in the business section and in the MDNA, having that throughout the document is really critical.
• 35:39
  SPEAKER_03: The SEC is going to focus on that.
• 35:41
  SPEAKER_03: So I think companies that are really thinking about this through the prep, um, using the right advisors, they're gonna get this right.
• 35:48
  SPEAKER_02: No, I I think that's great advice.
• 35:51
  SPEAKER_02: Um and I think, you know, really the things that you when you started highlighting just a lot of of the KPIs, right?
• 35:57
  SPEAKER_02: And focusing on the top five, that really stood out to me, right?
• 36:00
  SPEAKER_02: Because focus on those five KPIs that actually have an impact, that are driving, like, because you put too much in there, you're gonna confuse investors, right?
• 36:08
  SPEAKER_02: So I think you have to be very balanced in in how you approach it.
• 36:11
  SPEAKER_02: Um, Ryan, we've talked a lot about kind of you know the capital raising through the IPO process, but I did want to have you touch briefly on some other options um that companies can take um on it to raise capital.
• 36:23
  SPEAKER_02: You talk a little bit about those.
• 36:24
  SPEAKER_04: Oh, sure.
• 36:25
  SPEAKER_04: Um, so after if a company goes through, let's assume they have a successful IPO, they're a public company now, they have all the reporting requirements I I just described.
• 36:33
  SPEAKER_04: They're other, now that they are a public company, they they can use in many cases their um they can use equity issuances to raise further capital.
• 36:41
  SPEAKER_04: So one of the things we see is uh oftentimes we'll see what's referred to generally as like a follow-on offering.
• 36:48
  SPEAKER_04: Uh used to have usually happens sometimes within the first year.
• 36:53
  SPEAKER_04: Uh, it may be the company directly issuing additional equity.
• 36:57
  SPEAKER_04: It may be um selling shareholders actually um selling their their equity in an offering.
• 37:03
  SPEAKER_04: And usually in that that first year, you're required to do that on a uh another form s one.
• 37:09
  SPEAKER_04: You have a lot of the guts of it already from that initial one, but you you can do you can do that on an uh a form S1.
• 37:16
  SPEAKER_04: What I what I would say is the S uh the SEC historically uh had a provision back to some of the jobs and Fast Act uh information we discussed.
• 37:27
  SPEAKER_04: The SEC did have a process where within the first year after going public, you could still have subsequent registration statements be reviewed confidentially, which uh many companies take it take advantage of again for reasons we we discussed.
• 37:40
  SPEAKER_04: Recently, though, the SEC actually expanded that and said um we no longer are gonna limit that to a year.
• 37:46
  SPEAKER_04: In fact, if you've been a public company for 30 years, we're gonna allow another registration statement that you might have to be reviewed on a confidential basis.
• 37:55
  SPEAKER_04: So we're gonna see that a lot a lot more with the various registration statements.
• 38:01
  SPEAKER_04: Um after you get through that first year, many companies, um, if if you've grown enough in size and have met the requirements, you may meet the requirements to use a form S3, which is generally used for shelf registration statements, where you can essentially just register a certain block of securities to be able to take them down off the shelf and do an offering at a at a later period in time.
• 38:25
  SPEAKER_04: Each of those registration statements I just talked about has similar requirements you have to go through.
• 38:30
  SPEAKER_04: Do I have another acquisition that I need to provide financial statements for?
• 38:34
  SPEAKER_04: Are there proformas, et cetera?
• 38:36
  SPEAKER_04: Those are the types of um subsequent capital raises that you could take advantage of as a as a public company.
• 38:42
  SPEAKER_02: Yeah, I think those the the thing that I think about when it comes to like you know, you're getting to this point of you know, the different types of registration statements.
• 38:50
  SPEAKER_02: I think the the thing that I always tell people too, when it's like, well, what form do I use?
• 38:54
  SPEAKER_02: Right.
• 38:54
  SPEAKER_02: Well, you know, you you figure out your form, the form will tell you what information you need to provide based on what you're registering, right?
• 39:02
  SPEAKER_02: So so it is obviously Securities Council is gonna be along for the ride, right?
• 39:05
  SPEAKER_02: That they they they know this stuff, they they they do it every day.
• 39:08
  SPEAKER_02: But I think it's important that you follow what's required by the form itself, right?
• 39:12
  SPEAKER_02: It has very detailed instructions, and you go to the specific role and you walk through the specific role in a line by line to figure out what's required to be disclosed.
• 39:20
  SPEAKER_02: So thanks for that.
• 39:21
  SPEAKER_02: I I want to kind of wrap up with this conversation.
• 39:24
  SPEAKER_02: And really, it's just more focused on takeaways.
• 39:26
  SPEAKER_02: So if we think about any closing thoughts, I'll start with you, Mike.
• 39:30
  SPEAKER_02: Any takeaways for the audience?
• 39:32
  SPEAKER_03: Yeah, we we've been talking a lot about form S1.
• 39:35
  SPEAKER_03: And I just remind the audience it's more than simply a form, it's a company's opportunity to tell their story to the market.
• 39:41
  SPEAKER_03: And those that succeed are articulate, concise, um, and consistent throughout the document.
• 39:47
  SPEAKER_03: And that resonates with the investor group.
• 39:49
  SPEAKER_03: The other thing I would wrap on is that public company journey, being ready to be a public company, starts with an IPO readiness assessment 12 to 18 months in advance and really leverage that to project manage your process, start to finish.
• 40:04
  SPEAKER_03: That'll be critical for success.
• 40:06
  SPEAKER_03: Yeah, great points.
• 40:07
  SPEAKER_03: Ryan?
• 40:07
  SPEAKER_04: Uh yeah, I agree.
• 40:09
  SPEAKER_04: I mean, uh assembling that working group early so that you have all of the different voices and everyone that's gonna have a role to play in in the same room and on the same page is important.
• 40:18
  SPEAKER_04: Uh as a CPA at heart, I'll say that the financial statement requirements I talked about earlier, actually mapping that out, knowing what the end game is, what do you think you're gonna go hot off of?
• 40:28
  SPEAKER_04: And just backing up from there and saying, well, what do I not need to do?
• 40:32
  SPEAKER_04: Where should I be spending my time?
• 40:34
  SPEAKER_04: Because again, we we find a lot of situations where some of those financial statements are are just not needed.
• 40:38
  SPEAKER_02: Yeah, one thing I would recommend people do, and it's it's pretty simple.
• 40:42
  SPEAKER_02: It's hey, if you're interested in an IPO that you're watching on the market, pick up their filings, follow it.
• 40:48
  SPEAKER_02: Look, look at what they're disclosing, look at what they're saying, what they're telling the market.
• 40:52
  SPEAKER_02: Um, because I think it certainly is, I mean, people do that, right?
• 40:55
  SPEAKER_02: But I think it's looking at the actual documents that are being put on file.
• 40:58
  SPEAKER_02: I think taking that next step.
• 41:00
  SPEAKER_02: Um, it actually really will help you kind of accelerate your learning curve in this space.
• 41:04
  SPEAKER_02: So I want to thank you both, gentlemen, for for joining me.
• 41:07
  SPEAKER_02: Um, I think this is uh a way, a great way for us to kick off the series.
• 41:11
  SPEAKER_02: Um, but again, I want to thank you for your time.
• 41:14
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• 41:36
  SPEAKER_00: From thought leadership at PWC, I'm Heather Horn.
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