If you handle communications and/or public relations for a company that is planning to go public, your work together is about to become pretty intense.
Communications by publicly traded companies can be subject to amazingly intense scrutiny. In addition to having to worry now about regulators, lawyers, and disclosure rules, you also have another entirely new audience watching everything you say: Investors, and the media who speak to them. And that means your communications can have a huge impact on the value of the company.
So, take a deep breath, and start getting ready as early as possible. This will be more complicated than just writing a few press releases about an initial public offering — but with enough preparation and care, you’re in a position to help guide a company through one of its biggest steps.
1) Make sure everyone knows the rules. Especially if company leaders (or you) haven’t been through an IPO before, there are a lot of rules and jargon to learn. As the communications professional on the team, make sure everybody understands the rules related to what can and can’t be communicated, and when.
Start off by making sure everyone knows what the “quiet period” is (the time from when the company files with the SEC until the SEC declares that the registration statement is effective), and what can and can’t be said during that time. The SEC has a good overview. [https://www.sec.gov/answers/quiet.htm]
2) Get to know the whole team, including lawyers and employees. You’re probably already used to working with the company’s leaders. You’re about to also start working closely with corporate lawyers, who will help the company comply with all the SEC’s rules and regulations. Start building a relationship with them as early as possible, so that you can work together to build a communications strategy that stays within regulatory rules.
As a PR professional, your goal is usually getting the company to broadcast an effective message, while lawyers may prefer to err on the side of caution and have the company say as little as possible. But the truth is you’re all on the same team: You all want what’s best for the company. Build trust, which will help everyone involved understand each other’s perspectives; together, you can prevent issues from turning into legal problems.
Another new addition to your communications team is literally anybody who might talk with the public, including as receptionists and phone operators. Whatever they say also has a way of leaking back to investors, regulators, and the media — so help them understand the rules about what they can and can’t say, and the messages the company is trying to communicate to everyone.
3) Keep a lid on the IPO. Make sure everyone — official as well as unofficial spokespeople (including receptionists and rank-and-file employees) — avoids telling anyone that the company intends to go public. Even if someone says something about the IPO well before the paperwork is actually filed with the SEC (that is, before the quiet period actually starts), that information may well end up getting published during the quiet period, and that’s an SEC headache you don’t need.
4) Work on telling the company’s story. Of course you’ve always worked on telling the story of how the company has grown and succeeded, but it’s especially important to focus on this in the weeks leading up to the quiet period.
Soon, this narrative will be crucial in helping all these new audiences understand the company. So develop a story that describes the company’s competitive advantages and unique strengths, simply and without industry jargon. That story will serve as the basis for your corporate description in the prospectus — and it will be the basis of everything the company communicates throughout and after the IPO process.
5) Strengthen the company’s website. One of the great places to publish that company narrative is on the company website — again, well before the SEC filing. Make sure the entire website is up to date and answers basic questions reporters and potential investors are likely to have. Your website will stay online during the quiet period, and during those weeks it will be how industry influencers and potential investors learn about the company.
6) “Quiet period” does not mean “silent period.” The quiet period rules say the company can’t communicate anything that would deliberately influence investors or the price of company stock. So, well before the filing, establish a normal baseline for how the company publicly communicates on a routine basis — because that baseline is what the company will be measured against during the quiet period.
In other words, the lawyers aren’t going to let you publish a bunch of press releases after the SEC filing. So establish a regular timeline of press releases and product updates that you’ll start before the filing, that you’ll continue as business-as-usual during the quiet period, and that will become even more important once the company is public.
7) Build visibility early. When you’re setting that baseline for company visibility, don’t forget that you’re also establishing expectations that will carry through the IPO. Companies that are prominent and visible before the IPO typically price higher and trade higher afterward.
Again, well before the filing, figure out how to get the company’s story in front of reporters and communicators who would be interested. And don’t think it’s just national publications like the Wall Street Journal that matter: Industry trade publications, bloggers, and industry and Wall Street analysts can also help raise the company’s profile.
8) IPO day is not the end of communications. In fact, the IPO is a new beginning of communicating to the entirely new audience of potential investors. Take advantage of the quiet period to plan the debut of this newly public company. Figure out what messages you’re going to communicate, and anticipate how the public relations work you’re doing will complement the official reports and statements the company will have to make.
9) Continue to be careful about what the company says publicly. Limitations on information the company releases — through official as well as unofficial sources — don’t end with the quiet period. After the company goes public, employees have no right to material information before other stakeholders or investors. Make certain all employees understand the rules! Have internal policies in effect well before the IPO that explain how to handle material information and avoid insider trading.
Also, don’t forget that social media is another way your company communicates. Investors and regulators will be watching what the company posts and tweets. So make sure the legal teams and investor relations advisors are involved with your social media strategy, so the company doesn’t violate disclosure requirements.
10) Help maintain the company’s reputation. Investors aren’t just looking for a good story, they want a stable company that will give them a return on their money. The first nine months of being public will prove to Wall Street whether you can properly forecast your future in a way that’s useful to investors. Stick with that schedule of communications you established before the IPO, and focus on accurate, realistic projections about the company’s performance. It’s easier for the company to keep its good reputation than to have to rebuild it.
11) Watch how other companies are handling things. Understand what’s routine inside and outside the company’s industry, to figure out what other companies are communicating and how often. Investors will have expectations based on what other companies are doing, and it’s worth picking up the best ideas and practices that are out there. Use this to inform your strategy, from before the quiet period right up through the business’s successful life as a publicly traded company.