IPO Readiness and FP&A: An Unsung Function Powering Confidence and Company Performance

IPO readiness tests whether a finance organization can consistently deliver discipline, credibility, and execution, with FP&A playing a central role in elevating performance.

Recently, I co-hosted the FP&A Unlocked podcast with Paul Barnhurst and was joined by Riveron’s Jeff Bernstein to discuss the impact of FP&A on the IPO process and why CFOs and executive leaders must start well before an S-1 is drafted.

If you’re at a company that’s thinking about an IPO at some point in the near future, the approaches and best practices we discuss could significantly improve both the process and the long-term outcomes of becoming a public company.

It Starts with Being Intellectually Honest

Of all the workstreams in an IPO process, improving the FP&A process and organization tends to be overlooked in the rush to get an approved S-1 on historical numbers and metrics. Yet for leadership teams focused on elevating performance, the ability to consistently meet and exceed projections based on trusted inputs and KPIs is critical to value creation as a newly public entity.

The rigor of financial scrutiny intensifies when a company puts its forecast out to the market.  Wall Street analysts and investors are paid to dissect financial statements, non-GAAP measures, and projections.  If leadership is unable or unwilling to forecast with confidence, credibility erodes quickly, and market value often follows.  As Jeff stated in the discussion, a company must be “intellectually honest” about its abilities well before the IPO through back-testing, benchmarking, and stress-testing. Success depends on strengthening both organizational structure and financial technology in the 12 to 24 months prior to the transaction.  

The IPO Process Begins Well Before Drafting the S-1

“Preparation for the IPO probably starts two years before the actual IPO,” Jeff noted. Effective preparation extends beyond transaction readiness and requires a fundamental shift in how the finance organization operates, starting with:

• Preparing for PCAOB (Public Company Accounting Oversight Board) audits
• Engaging with analysts to understand what metrics or KPIs are needed, for the firm to understand how The Street would model the financials
• Creating effective KPIs or non-GAAP measures to determine how often to use those in discussions of company performance
• Benchmarking performance against relevant public peers
• Asking bankers and analysts questions on best practices and what they expect well before selecting a bank and filing the S-1

Banker selection gives the company flexibility to explore and understand approaches and perceptions. Once you start the process, SEC rules limit your ability to have open and honest dialogue, as Jeff explains.

Starting early allows finance leaders to intentionally re-orient the FP&A organization around public-company performance standards, rather than reacting under pressure—and align the business around how it will perform and communicate as a public company. In my own experience, going through the IPO at Visa in 2008, the company followed the process that Jeff described — starting groundwork two years in advance.  Visa also managed the company as if it were public six months prior to the IPO to establish the right cadence of reporting, filing, and earnings calls. 

In my opinion, this discipline helped make Visa one of the most successful IPOs in US history. Furthermore, it also reinforced a culture of execution and performance that extended well beyond the transaction itself.

The Importance of the FP&A Forecast Model

During the IPO process, the firm will have the opportunity to work with the lead and syndicated banks on how the model is constructed.  This is where alignment between the CFO and FP&A teams becomes critical— particularly around growth assumptions, level of detail, and performance expectations.

The objective is a forecast that is ambitious enough to attract investors, yet conservative enough to be consistently achieved, and exceeded, quarter after quarter. This “beat-and-raise” dynamic is less about optics and more about sustaining performance credibility in the public markets.

As many in FP&A know, forecasting is as much art as it is science.  There is no single formula, but there is a sweet spot, and often it takes many iterations to find it. Jeff rightly pointed out that one of the hallmarks of being a long-term winner in the market is transparency and organizational integrity. 

Great FP&A is Table Stakes for Great Public Companies

Great public companies, and great companies in general, succeed because they make thoughtful, data-driven decisions, and FP&A sits at the center of that capability. 

Understanding the underlying drivers, assumptions, and interdependencies is critical to producing accurate and grounded forecasting.  An executive I previously worked under used to describe the team as the “point of the spear.” 

For CFOs and FP&A professional leaders committed to elevating performance, a forward-looking credible, and proactive FP&A function is a prerequisite for sustained success as a public company.  

Listen to the full episode here.