Raising Capital: Preparing Now for Better Markets

SEATTLE (February 2, 2009) – A group of corporate finance lawyers at Perkins Coie LLP are releasing The Initial Public Offering Handbook, a comprehensive guide to preparing for an IPO.  While the authors acknowledge that the timing of the book launch seems inopportune during the current IPO drought, they note that IPOs remain an important long-term strategy for many companies, and that the IPO market, when it rebounds, will favor the prepared.

“When we began developing the book nearly two years ago, it was an entirely different market,” said David McShea, an attorney and one of the authors of The IPO Handbook.  “In many ways, however, we think the book is even more important in the current market environment.  As distant as it may seem, the IPO market will rebound, and there will be pent-up demand and intense competition for IPOs when the markets are ready,” added McShea.  “Historically we have seen that companies who prepare in advance can best take advantage of the IPO window when it opens."

McShea, along with co-authors Chris Hall and Sonny Allison, are partners at the law firm Perkins Coie LLP and have worked on numerous IPOs and financings throughout their careers.  The 120-page book, fully titled The Initial Public Offering Handbook: A Guide for Entrepreneurs, Executives, Directors and Private Investors, is published by Merrill Corporation.  The book covers every stage of the IPO process from examining the benefits and costs of going public; to selection of the underwriters; onto the drafting and filing of the registration statement; and concluding with pricing, closing and trading of the company's stock, as well as post-IPO compliance for a public company.  Directors will value the special section on deciding whether to serve on a public company board, and private investors will want to read the chapter explaining special considerations for private equity and venture capital investors.  More than two-dozen attorneys at Perkins Coie contributed to the book’s development.

Preparing for IPO as Part of Long Term Strategy

 “The tough market for IPOs of 2008 has continued into 2009",” said McShea, who focuses his practice on the representation of start-up and high growth technology companies, venture capital firms and private investment firms.  “And though the current market can affect the attractiveness of an IPO in the short term, it does not change the fact that many successful private companies continue to include the possibility of an IPO in their long-term thinking."

“This is a challenging time, but if history has taught us anything it’s that markets are cyclical and the IPO market will rebound,” said co-author Chris Hall, a partner in Perkins Coie’s Portland office specializing in corporate finance, M&A and private equity matters.  “There are entrepreneurs and companies out there growing based on the strength and innovation of their products and services.  They need capital to grow and develop.  Despite the current market cycle, there will continue to be a need and demand for access to the capital markets.  Most experts seem to be pointing to a 2010 rebound in the IPO market.  If that’s the case, now is the time to begin preparing and informing oneself about the IPO process.”

Greater Challenges, Scrutiny Lie Ahead

The authors point out that the IPO process can take many months in terms of due diligence, preparation of the necessary documents and identification of key partners including investment bankers.  They also note that the “game has changed” a bit and that new regulations, alternative financing options and changes in the financial industry have made filing an IPO a bit different today than it was in the boom years of the late 1990s.

“An initial public offering is the realization of a dream for many entrepreneurs, executives, board members and stockholders -- a singular achievement that demonstrates their success in building a strong business and creating value for owners, employees and cus­tomers. However, an initial public offering is not only a milestone, it is the entrance into a new stage—life as a public company—that presents its own unique opportunities, risks and challenges,” said Sonny Allison, co-author of The IPO Handbook and a partner in Perkins Coie’s Denver office who focuses on M&A, corporate finance and securities. 

“Before choosing to pursue an initial public offering, a company’s board and key executives need to analyze the relevant considerations and weigh the advantages and disadvantages carefully.  We wrote The IPO Handbook to provide these executives with the information they need to make informed decisions.”

“The Initial Public Offering Handbook is an efficient way for entrepreneurs, officers, directors and investors to get their arms around the topic,” added Hall.  “We owe a lot to our colleagues across the firm who contributed to the book to ensure it provides in-depth information and guidance on the IPO process from an expert perspective.”

How to Obtain a Copy of The Initial Public Offering Handbook

Perkins Coie’s Corporate Finance practice represents market leaders in a wide range of industries, including wireless technology, hardware, software, telecommunications, Internet, aerospace, biotechnology and e-commerce.  The firm advises clients in a wide range of public and private debt and equity financings, and is a leader in venture capital transactions, IPOs and follow-on public offerings.