Howard Berkenblit
Late last fall, I completed my first marathon. Thanks to careful preparation and training, the race was a success and I met my goals. In the days that followed, it occurred to me that the marathon experience was similar to the IPO experience in many ways and provides some valuable lessons to those companies considering going public.
Don’t underestimate how long it takes to prepare. To train properly for a marathon, a runner must start focusing on a regimented schedule four to five months in advance. Similarly, an IPO takes months of advance preparation. A well-organized company that already has a diligence data room, plans for governance changes, complete financial statements, organized records and a start on the required disclosures is much more likely to succeed on a timely basis.
Setting up a schedule and following it is vital. Going out too fast will tire you out for the later portions. An evenly paced work stream with set milestones makes for a smooth event with fewer moments of panic. A marathon is exponentially harder than shorter races. It is imperative to establish a formal training schedule with set distances at the outset of training and diligently follow it. In the same vein, an IPO is exponentially harder than most private financings a pre-IPO company has completed. There are higher standards, more parties involved, more steps, more documents and required governance modifications – more of everything. Working with advisers to establish a schedule and reviewing it constantly will make the IPO process go much more smoothly.
Some flexibility is required. Even with the best schedules, unpredictable events occur that require flexibility. Rather than get frustrated by training interruptions, I was able to shift around the schedule as long as I covered the required distances each week. At the same time, the reasons for diverging from the schedule had to be compelling. The marathon was one of the most important priorities during my training – if I had not treated it that way, it would have shown in my results. During an IPO, a company still has a business to run. Events happen that impact IPO schedules and planning. A company with nimble management that thinks creatively about balancing the high priority of the IPO and the need to stay focused with the challenges of day-to-day business will succeed.
Keep your eyes on the goal. Marathon training requires a lot of long, lonely miles but you have to keep the endgame of crossing the finish line in mind. The IPO process can be grueling – it taxes company resources, often involves minutiae and can feel like it is dragging. Companies must continue to focus on their ultimate goal and not be overshadowed by procedural roadblocks and mental exhaustion along the way.
Get advice, but know which to take.For both marathons and IPOs, good advisers are essential. Many people have successfully run marathons and many companies have had successful IPOs. But every runner and every company is different. What works for some may not work for others. Seek out the wisdom of people who have been through the process and look for recurring themes.
Be appreciative of all constituencies. While running a marathon is more individualistic than an IPO, it cannot be done without support from family, friends and marathon veterans. My race also had deeper meaning, as the goals of the charity I supported became part of my inspiration. I am not claiming an IPO is a magnanimous gesture. However, many people will work hard to help the company along the way – lawyers, accountants, bankers, financial printers, investor relations firms and many more are all key players that bring important knowledge and experience to the table. Take the time to understand the contributions of each and express appreciation for their contributions.
Listen to what your body is telling you. In training for the marathon, I had to learn about “fueling” my body to ensure that I stayed healthy. Finding the proper balances for hydration, nutrition and equipment took time and some trial and error. In the IPO process, companies must pay attention to different forces – signs in the markets, trends in the business, what peers are doing, etc. In addition to the regular preparations on the “official” schedule, companies must constantly observe what is going on around them to ensure that their corporate “body” stays healthy and prepared for the road ahead.
Don’t talk about it beforehand. Runners don’t talk about their training outside of family or their running partners. During an IPO, talking about the IPO is not only bad form, in many cases it is also illegal!
Perhaps the best piece of advice is to enjoy it when it’s done. Finishing the marathon or debuting your IPO provides incredible highs that represent the culmination of extraordinary efforts. The well-prepared can look forward to the triumphant end to the process – crossing the finish line literally or figuratively. Savor those moments, as they will be over quickly – then get back to work.
