What infrastructure do public companies have that yours doesn’t?
In 2019, a mid-market medical device company spent fourteen months and millions of dollars preparing for an IPO. They had hit every revenue target. Their board was ecstatic. But when the auditors arrived for the final autopsy, they found revenue recognition practices that didn’t follow GAAP standards. The deal died in the room. Two years later, the company sold for half their original target valuation.
In this episode of How To Founder, we sit down with Aman Verjee—former Divisional CFO at eBay and CFO at Sonos—to discuss why most founders fail the IPO readiness test and how to build a foundation that survives public scrutiny.
The Liquidity Illusion
Most founders view an IPO as a retirement party. But for a CEO, it’s closer to a cap table swap. You aren't exiting; you’re just swapping private investors for institutional ones like pension funds and hedge funds. These new partners don't care about your startup's "ARR" or internal metrics; they care about SEC-approved reports and quarterly earnings calls. If you don't have the team—a public-ready CFO, a General Counsel who knows the regs, and an independent finance expert on your board—you aren't ready to ring the bell.
The Cost of Public Performance
Going public costs millions before you even know if the market will accept you. Beyond the $2 million in accounting and legal fees to file the S-1, there is the "Audit Scrutiny" that kills deals in due diligence. Smart founders start building this infrastructure two years before they ever talk to a banker. They hire Big Four auditors early to scrub the books and ensure their revenue recognition survives the microscope.
The Secondary Advantage
Aman reveals a shift in the market that many founders haven't fully grasped: IPOs aren't the only path to liquidity anymore. With companies like SpaceX and Canva staying private longer, secondary markets and tender offers allow employees to get liquid without the crushing overhead of public reporting. For many, the smartest IPO is the one you never do.
Watch the Full Episode on IPO Readiness with expert Aman Verjee below:
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