How long does it take to go public?

Our average prospective client takes approximately three weeks to engage us and being the process. It then takes a week or two to drill down into the details and coordinate scheduling of an accountant, auditor and securities attorney.

An organized company that has internally prepared financial statements can be ready for an audit within six weeks. It can be faster if a company has books and records prepared by a CPA, or reviewed or audited by an accounting firm.

It generally takes approximately eight weeks for an accounting firm to complete an audit of income statements, balance sheets, statements of cash flow and footnotes, as well as to review the draft registration statement to be filed with the Securities and Exchange Commission.

Preparation of the documents required to begin drafting a registration statement to be filed with the relevant regulatory agencies takes a few days. Once the information we require is aggregated, the registration statement is normally drafted within three to four weeks. This is usually done concurrent with the accounting work and financial audits.

When the audited financial statements are prepared, the accounting and legal documents are integrated and filed with the relevant regulatory agency. We typically draft the registration statement and utilize a third-party firm to convert the final documents to a technical format acceptable for filing.

The review and comment phase with the Securities and Exchange Commission usually follows a path: the SEC typically responds with comments to the initial filing in 30 days. Each of the comments are then addressed, which may take several days. Once completed, a revised registration statement is filed with the SEC for additional review and comments. The typical review, comment and amendment cycle typically lasts between 60 to 90 days or longer, depending on the company and its advisors.

As part of the process to qualify for a public listing, a market maker must file an application with FINRA. The review process typically presents few problems for most companies if they satisfied all the regulatory agency requirements. However, this process can take 30 to 60 days to complete.

Each stock exchange has a different review process and may look at different factors, such as the number of shareholders, amount of capital invested, and the relationship between and among all shareholders. This process is normally completed concurrently with the FINRA review

The timeline is further impacted when a company seeks to raise capital via private placement before filing a registration statement with the SEC, or once a registration statement is declared effective by the SEC.

This article discussed several of the high-level steps for a private company to go public. While many of the steps can be influenced by management and its advisors, there is a high degree of dependency on accountants, auditors, lawyers and regulatory review agents which can impact the final timeline to complete the process. However, our average client has become publicly listed about eight months from starting the process.