Your underwriters will conduct a thorough review of your company and its operations to ensure that your prospectus provides full, true, and plain disclosure. This in-depth process includes discussions with senior management, inspections of significant operating facilities, and reviews of the company itself, financial information, and material agreements.
You will need to complete the appropriate documentation and provide the information required by the stock exchange to apply for a listing. Generally, this process runs parallel with the preparation of the preliminary prospectus and the underwriters' due diligence.
Your preliminary prospectus is filed with securities regulators in the jurisdictions in which you wish to sell securities. The securities commissions will coordinate the review of your prospectus and provide you with a letter describing any deficiencies noted in their review (referred to as a comment letter). Once the securities regulators receive satisfactory responses to these concerns, you will be in a position to file your final prospectus.
Your prospectus is, in part, a marketing document, but it is important to augment it with other marketing tools. Once the preliminary prospectus is filed, securities legislation permits the company to commence limited selling efforts. During this period, your underwriting syndicate distributes marketing materials to potential investors and solicits expressions of interest. This process typically involves developing a road show presentation and working with your underwriters to develop a green sheet (a summary of the proposed offering containing prospectus and other information). On the road show, you sell your story to potential investors.
Since pricing reflects the market's valuation of your company, you should monitor market conditions, comparable companies, and your offering's potential pricing throughout the process of going public. This activity will culminate in a round of final negotiations with your underwriters in the day or two prior to filing your final prospectus. At this point, you are reasonably certain you can complete your public offering.
With the final terms of the offering now complete, you update your prospectus to reflect the pricing information and address changes required to satisfy regulatory bodies. When your team is satisfied with the final prospectus, you file it, along with certain other information, with the relevant securities commissions. Once you obtain receipts from these commissions, your underwriters are able to sell your securities.
The closing meeting signifies the successful completion of your offering. You receive the proceeds of your offering in exchange for shares of your company. The closing also concludes the going public process. You begin your life as a public company and assume the increased accountabilities that exist in the public domain.