The webcast examined the significant burdens going public puts on companies along with recent improvements as a result of the JOBS Act. Specifically, leaders from Deloitte's emerging growth company and technology industry practices provided insights into how companies can navigate the increasingly complex IPO landscape, particularly in the face of residual economic uncertainty and volatility in the capital markets.
"For emerging growth companies, IPOs are pivotal for expansion, and a poorly-timed offering can be incredibly difficult to overcome," said Heather Gates, managing director and West region emerging growth company practice leader, Deloitte Services LP. "Investment bankers keep a close watch on overall market volatility to try to select the best time for a company to go public. Lower market volatility tends to produce better results and a greater number of IPOs."
According to Gates, in addition to timing the market, more than a quarter (28.7 percent) of respondents ranked building the right team and business infrastructure as a major challenge. Having strong people, systems and processes in place that can withstand the rigors of the IPO process should be top of mind for companies.
"Companies can pave the way for success by focusing on accounting, financial, legal, business and systems matters at least 18-24 months in advance of going public. Often, companies wait too long to bring on a professional management team, creating a last-minute scramble that may result in missing opportunities and risking long-term success," said Mohana Dissanayake, partner and audit technology industry practice leader, Deloitte & Touche LLP. "Assembling a strong business infrastructure, investing in the right finance personnel, and building the right team are crucial not only for the initial offering, but for establishing credibility in the eyes of investors in subsequent quarters."
Executives also cited attracting the right investors and analysts (20.4 percent), and to a lesser extent, advance planning and early adoption (10.1 percent) as major challenges in their decision-making process. Despite the obstacles, more than 34 percent of respondents say IPO activity will increase moderately this year.
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including 80 percent of the Fortune 500. Our people work across more than 20 industry sectors to deliver measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to make their most challenging business decisions with confidence, and help lead the way toward a stronger economy and a healthy society.
As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
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