Presenting at Cass Business School...

...and why an IPO is a bit like getting married.

Off to Cass Business School yesterday to present at the Cityzone IPO Club sponsored by law firm Fasken Martineau and accountancy firm BDO.

The presentation I gave was one I use frequently as it talks about what companies need to do from a finance perspective to prepare not just for IPO but for any fundraising, and what they need to do to make a success of their IPO.

This includes not having related party transactions. Crudely put this means not siphoning money out of the company. Many entrepreneurs run their businesses from property they own in their own right rather than it being owned by the business. That’s all very well if you don’t have external investors but if you do they will want to see that it’s at a market rent and not a ruse by which the entrepreneur can take shareholders cash out of the business. The property example is a common and simple one but there are many other more exotic arrangements (like company jets) which I’ll describe another time. Other areas companies usually have to clean up their act is in ownership of key assets. Again, many entrepreneurs will try to keep the key assets, eg patents, trademarks etc. out of the company so as not to jeopardise them but also because they feel the assets are personal to them. And finally, these days we have to have a few slides on corporate governance, and the importance of good control, reporting, non executive directors etc..
I went to a rather average university and never got round to going to business school. I would have liked to but could never fit it amongst work and life, in so I’m always a little overawed by any good academic institution like Cass Business school. A friend of mine recently became a professor and whilst I’m not one for titles, if I had a title other than Mr then it would have to be Prof. It sounds so like you didn’t really want it; that it was foist upon you for your greatness, unlike say Sir or Lord which most people who receive it were probably very desperate for it. Alas, to get the Prof title you need to need to follow the academic route, which frankly was never my cup of tea, or should I say as in academia, my glass of port.
The Cityzone IPO Club is run by the silky-tongued, boy-band sound-a-like, founder of Cityzone, Ronan Bryan, who manages the room deftly and with quiet confidence and the usual Celtic charm. He makes a group of professional advisers and entrepreneurs feel like it’s just a get together of friends, and the interaction amongst the group is quite stimulating.

I go on to talk about how to get the most out of going through the costly, and time-consuming process of an IPO. Many companies see it as an end point, in the same way as some men see marriage as an end point, but looking optimistically it’s actually the start of something potentially beautiful, and like marriage it doesn’t just create happiness by itself. Being a quoted company, like being in a successful marriage, requires hard work, and getting through the tough times. A lesson that many entreprenuers often forget.