The Order of Operations Most Companies Get Wrong Before Going Public

The most common mistake pre-IPO companies make is hiring a banker first. It feels intuitive — the banker is the one who will take you public, so start there. But that logic gets the sequence exactly backwards, and it costs companies real money.

Here's the problem: a banker's job is to close a transaction. That's how they get paid. When you bring a banker in before you've done the foundational work — before you have audited financials, a clean cap table, a tested investor narrative, and a governance structure that will survive SEC scrutiny — you're walking into a negotiation without any leverage.

The banker will assess where you are and price the deal accordingly. If your house isn't in order, that assessment will reflect it. You'll get a lower valuation, a more dilutive structure, and terms that favor the bank's ability to close the deal quickly — not your ability to build a durable public company.

The right sequence looks like this: First, get your financial house in order. That means PCAOB-ready audited financials, a clean cap table, and financial controls that will hold up to underwriter due diligence. This takes longer than most companies expect — often 12 to 18 months. Second, build your investor narrative before you need it. The story that works in a roadshow is not the story you improvise in the first meeting with a banker. It's a narrative that has been stress-tested against real institutional objections. Third, get your governance right. Independent board members, proper committee charters, D&O coverage — these are not afterthoughts. They are prerequisites for a credible listing. Fourth, then bring in the banker. At this point, you have leverage. You know what your company is worth, you have a story that institutions will respond to, and you have the documentation to support it.

The companies that get this sequence right come to market with stronger valuations, better institutional reception, and a management team that isn't improvising IR in real time while trying to run a newly public company. The companies that get it wrong spend the first two years of their public life trying to fix the mistakes they made before the bell rang.

Getting the order of operations right is not complicated. It just requires discipline — and an advisor who isn't in a hurry to close a transaction.