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Considering Going Public? Here’s How to Prepare for an IPO – ReadWrite



Chen Amit

Everyone loves an IPO. Investors see the first issuing of public stock as a way to get in on the ground floor of the next Apple or Tesla. For tech startups, an IPO represents the ultimate validation of their vision — not to mention a prime opportunity to raise enough capital to turbocharge growth.

Considering Going Public? Here’s How to Prepare for an IPO

As it turns out, we love IPOs so much that the pandemic did not affect the number of companies going public. The reality is just the opposite: 2020 saw a multitude of high-profile tech businesses go public, including Unity Technologies, Palantir, and Snowflake. In fact, 494 IPOs collectively raised $174 billion last year, with both numbers representing new records.

Low-interest rates, idle capital, and ambitious private companies itching for investors should keep IPO activity brisk through 2021 and beyond.

Regardless, any tech company with its own ambition to reach public markets needs to get itself IPO-ready first. Here’s what you need to know:

Measuring IPO Readiness

Tech startups go to great lengths to prove they’re viable companies. Through multiple rounds of investment (pre-seed funding; seed rounds; and series A, B, and C), startups expose their inner workings for evaluation and analysis.

Investors want to know whether a company merits their support and to what extent. When someone hands over a check, it’s easy to interpret that as confirmation the company has its house in order.

However, just because a tech startup successfully courts investors doesn’t mean it’s ready for an IPO.

At a minimum, a tech company on the cusp of an IPO needs to be closing its books consistently and systematically month after month. There must be close alignment between executives and business objectives.

Similarly, the company also needs the wherewithal to pay for an avalanche of pre-IPO costs: audit fees and financial reporting documents on top of the costs associated with creating an investor relations department and accounting oversight committee.

At the same time, although knowing how to prepare for an IPO is the start, reaching that, “I’m prepared,” state is much harder.

Obstacles to the IPO

Without an IPO readiness road map, promising companies can miss important details that delay the IPO or cause a weak debut on public markets. Too many companies focus narrowly on accounting and finance, for instance. Important as those are, the entire company needs to be ready to go public, from the C-suite to the front lines.

Realistically, it takes one to two years between when a tech company decides to go public and when it reaches true IPO readiness. That window of preparation and readiness gives the entire operation time to learn how to behave like a public company.

Perhaps unsurprisingly, leaders at 98% of organizations that had recently completed the IPO process admitted they wished their assessment process and framework were more formal. It takes a dedicated IPO readiness road map and team to check off all the boxes, and thoroughness matters.

If every aspect of the company isn’t IPO ready — no aspect of the company is.

It’s all or nothing when it comes to your company actually being ready to be a public company.

Creating an IPO Readiness Road Map

Keep your IPO on track by starting the journey with a comprehensive plan built around these priorities:

1. Establishing a world-class close

Public companies are subject to strict financial reporting requirements, and meeting those requirements starts by conducting an efficient, accurate close. Plus, a quality closing process gives decision-makers access to quality financial insights faster.

These quality financial insights are invaluable for making smart choices about going public and leveraging an influx of capital.

While the speed of this close matters, so does control, accountability, and first-time accuracy.

As part of the IPO plan, work to systematize the close and eliminate bottlenecks and unnecessary complexities. Going public with a seamless closing process in place makes it vastly easier to hit the ground running.

2. Aligning planning, reporting, and analytics

Public or otherwise, successful companies run on data. The pre-IPO phase is a great time to begin collecting, integrating, and leveraging more data sources. Additional data improves the depth and breadth of the reporting process while enabling automation to replace basic manual processes.

To some degree, every IPO readiness plan should explore how the company uses data and what it could do better.

Much like a strong close process, this information will smooth out the road toward the IPO and everything after.

3. Preparing for public reporting

Public companies are accountable to shareholders first and foremost. With that obligation comes new demands for transparency, accuracy, speed, and consistency — along with tougher penalties when it comes to mistakes. The demands of public accounting require prior experience. If you don’t have prior experience that exists on the accounting team already — include a recruiting effort in your IPO readiness road map.

Similarly, good technology is also critical. Connecting accountants, data, and process controls requires the best of today’s workflow and collaboration technology.

As with the other entries on this list, getting started before the IPO also makes more sense (and returns more value) than waiting until after going public.

Moving Forward With Your IPO

Many tech startups with the potential to go public have enjoyed runaway success from the start. They haven’t had to plan very far forward because they’ve been propelled by their own potential and increasing infusions of investor cash.

If there was ever a time to plan, prepare, and proceed cautiously — it’s essential before the IPO. Make the most of this time instead of rushing to get through the process.

Image Credit: nataliya vaitkevich; pexels

Chen Amit

Co-founder and CEO of Tipalti

Chen Amit is the co-founder and CEO of Tipalti, a payment automation software that helps businesses manage their entire supplier payments operations.


Fintech Kennek raises $12.5M seed round to digitize lending



Google eyed for $2 billion Anthropic deal after major Amazon play

London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Fortune 500’s race for generative AI breakthroughs



Deanna Ritchie

As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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UK seizes web3 opportunity simplifying crypto regulations



Deanna Ritchie

As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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