The decision to go IPO is one of the most exciting milestones in a company’s journey—and the start of an incredibly busy and challenging time. While the decision tends to center on the big event, the work leading up to the initial public offering and afterward is enormous and can strain an already busy team. For CFOs and other senior executives who need to lead their company through their initial public offering, here is a guide to going public.

A CFO Guide to IPOs: Don’t Underestimate the Work Involved 

Going IPO is complex and expensive—and time consuming. The prep work leading up to the IPO could take as long as two years. Smart companies build their infrastructure well in advance to be ready for the moment. Then there’s the constant scrutiny that becomes a way of life once the S-1 gets in the hands of analysts, investors and competitors.

You’ll need to be ready for the possibility that regulators will have a lot of questions, in addition to inquiries from savvy investors. Making the wrong move at any point could hurt the company’s growth potential and lead to employee burnout, just when you need your most valued performers the most. You’ll want to cover your bases before finalizing the decision to go public:

Make sure you’re doing it for the right reasons: Personal wealth buildup and boosts to the ego are side benefits to a successful IPO—but the focus should be on raising capital to fund the company’s growth plans.

Consider the alternatives: To explore whether going public makes the most sense for the business at this time, also weigh the pros and cons of other exit strategies, such as a merger or acquisition, strategic alliance, or private equity funding.

Picture the changes ahead: The company as you know it is going to change, as it moves from an organization run by just a few people to a company owned by anyone who wants to buy a piece. Investors will have a right to some decision-making power, and management will no longer have all the control. 

Preparing for Your IPO

Is your company IPO ready? Smart companies that have an IPO in their sights get their financial house in order early on. But you’ll need more than audited financial statements and an S-1 filing to be “ready.” Here are few of the many other steps you’ll need to cover:

  • Know your story: Consistency matters, from the prospectus to the words on your website to the narratives told by senior leaders as they promote the company at roadshows. Anticipate questions and have potential answers ready. How the company describes its talent, product roadmap, geographic expansion and goals, can highly influence share price. 
  • Act like the company is already public: By operating like a public company, as early as a year before the IPO, you can make improvements along the way, such as upgrading outdated systems, wiping out manual processes and overcoming the learning curve of SEC requirements.
  • Develop a SOX timeline: You’ll have until the second 10-K to submit your first Sarbanes-Oxley compliance report, but you’ll need a well-designed system of internal controls that will help prevent material misstatements to financial statements well before that time.

Managing Your Company Through the Post-IPO Transition

A culture shock is inevitable as the company takes on a more disciplined way of operating. Decision-making will be centered around short-term needs and results, rather than the long term. Employees need to be kept informed about the company’s direction in addition to the new expectations on behavior as they’ll have to follow to comply with insider trading rules and restrictions.

Decide how much of your old culture to retain, figure out how to manage the new one, and evaluate the staff to take note of any skill gaps. You’ll need people who are open-minded and willing to switch to new systems and processes, while being able to meet stricter deadlines and shorter turnaround times.

RoseRyan as Your IPO Guide 

As you can tell from this IPO guide, operating as a public company is like living in a whole other world. You need people who have taken companies through the entire IPO process who can help you make sense of it, and thrive in it. They’ll guide you through the before and after of the IPO, by keeping you informed about what to expect, preparing the company for this new world, and getting it through the rocky transitional period. And they’ll fill in the skills gaps and situate your staff with the new way of working. (We’ve also served as a US IPO guide for companies based outside the country that want to list here.)

With tight financial accounting and reporting, and a robust system with efficient, practical processes, the company will be set up for a maximum valuation and its new class of investors. Learn all about RoseRyan’s Transaction Advisory Services and how we can manage your IPO process from start to finish.

Scaling the business is a top goal for many startups at a certain point. To get to the next level, it’s time to invest in the skills your company is missing, at a pace that isn’t too much, too soon. Since the people aspect of the business is both your most valuable and priciest resource, you’ll want to put attention on scaling your people as you scale your business.

What Do We Mean by Scaling?

Scaling puts the focus on growing the business with intention, in a cost-effective, efficient way. It requires laying down a foundation for supporting and enabling this growth, with streamlined, consistent processes; order in the financial operations; with the right people, systems, and partners in place. For emerging growth companies, shifting gears from survival mode to scaling requires big changes, including new faces—but that doesn’t mean you need to fully load up on payroll right away.

Scaling for Skills: What Do You Have, What Do You Need?

Take a look at your current employees and leadership team, and consider what skillsets you may need to bring in now and over time:

Evaluate everyone. Some of the people who were once a good fit for getting the company off the ground may not be right for the new version of the company. Look at the strengths and weaknesses within your staff. You may need to rethink some roles, add new ones, and consider how outsourcing can fill in some gaps, on a flexible basis. These evaluations may lead to tough calls if some employees are not able, or unwilling, to scale with the company.

Understand current and future gaps. What skills will make the company stronger starting today? What about the significant changes you’ll be pursuing? If an IPO is on the horizon, for example, does anyone on staff have experience working at a publicly traded company? The expectations and scrutiny are higher, and experience with all that entails will be needed.

Don’t underestimate the need for flexibility. For the immediate future, as the company adopts new processes and systems, you’ll want to know whether the people you have on board are adaptable and open to change. Changes are never easy, but some people are roadblocks. You want people who are excited to—or at least willing to—learn and adapt to new technologies and new ways of working (smarter, not harder).

Be forthcoming about the changes. Some employees will discover that the future version of the company is not for them. They simply may prefer working in a startup environment and are averse to adjusting to a more structured environment.

People Principles for Scaling

Follow these principles as you become aware of the people who want to grow with the company, and the fluctuating skills you will need to bring in:

Make a plan. How will you take the company from point A to point B? How will you fund any expansions without burning through too much cash? What skills are missing and need to be filled now, and what skills could be filled later? And which skills could be outsourced for a time before hiring someone full-time? 

Build a great team and help them shine. Put effort into bringing out the best of those who are staying on board. The culture will shift as the company evolves but you can shape it into the kind of environment where people feel welcome, where they want to be their best selves and do their best work. Think about how the company can nurture the talents you have and keep everyone engaged. Let your star performers do what they do, and move out of the way so that they can shine.

Be creative with the skills you need. Outsourcing skills that are not core to the business (i.e., finance and accounting, marketing, IT) can help you supplement any missing skillsets that will help the company advance, build in cost control to your growth plans, and free up those star performers and other employees to focus on core functions.

Outsourcing provides optimum flexibility by reducing the risk of taking on full-time staffers for what could end up being a temporary need. When you find an outsourcing partner that can provide you with a range of talents and knowledge, you can access the level of expertise you need, when you need it.

Gaining Expertise, at the Right Level

For nearly 30 years, RoseRyan has helped hundreds of fast-moving companies achieve their growth goals, by helping them build practical plans; develop solid financial foundations; and supplement their skillsets with flexible, cost-efficient solutions. Access to expertise, at a part-time level in the beginning of the scaling effort, can help the company control costs and move at a sustainable pace. Then, as the company successfully advances with its plan, RoseRyan will train and transition incoming full-timers at the appropriate time. It’s one of the many ways we guide companies to greatness.

Ready to make a strategic move with your emerging growth company? Contact RoseRyan today to find out how we can help.

As Chair of RoseRyan, which she founded in 1993, Kathy Ryan guides our finance and accounting consulting firm’s overall mission, strategy, direction and investment decisions. She guided the firm for 26 years under an innovative business model, with flexible work arrangements coupled with a highly supportive, values-based culture, before naming David Roberson as chief executive in 2020. Kathy has been recognized as a thought leader, innovator and strategist, building upon her extensive CEO and CFO experience working with more than 50 Silicon Valley startups. Before RoseRyan, Kathy was director of finance at Quantum and tax manager at Price Waterhouse.

Without a doubt one of the most major milestones in a company’s growth journey is going public. That ringing of the opening bell (either literally or figuratively) for your IPO leads to another milestone the company will soon have to hit: becoming SOX compliant.

While the Sarbanes-Oxley Act of 2002 features many provisions designed to prevent financial fraud and enhance corporate governance, Section 404 in particular becomes a pressing concern soon after an initial public offering. This is when management will weigh in on the effectiveness of the company’s internal controls over financial reporting and, eventually, the company’s external auditors will offer an opinion as well.

Challenges in Establishing an Effective SOX Compliance Program

Here are a just a few of the challenges companies face when setting up an effective SOX compliance program:

A shift in some practices. Any change can be tough. The team may have been doing something a certain way for a long time and haven’t yet realized the practice could have a detrimental effect on the financial operations or the veracity of the financial information. New systems may need to be put in place that could take some time to learn. A cultural shift will need to occur if the “tone at the top” (namely the CEO and CFO) isn’t encouraging the best behavior throughout the company.

For the most part, professionals know what the ethical, right thing to do is—however, when systems are put in place to formalize that, it can require some adjustments. SOX experts who are practical in nature and flexible to the companies they work with know this already and come up with solutions that work for the company (its size, industry, complexity).

Disparate ways of working. Cultural differences among geographically dispersed offices can affect the company’s overall need to comply with SOX. Remote offices may follow customs and practices that don’t yet align with where the company needs to shift.

Ever-evolving risks. Here’s where SOX compliance is rarely if ever the same year to year. The top risks affecting the company are frequently changing as are emerging risks that the company may need to address. External experts are often invaluable in this regard as they work with multiple companies and see everything—they can seamlessly incorporate best practices they’ve picked up in the field and adjust them to your company.

Benefits of a SOX Compliance Program

In addition to meeting corporate governance compliance requirements, a SOX program offers multiple benefits, including the ones listed below.

Minimizes the risk of a material misstatement of the financial statement and fraud risk. With the right systems and processes in place, your company can prevent (or better detect) incidents of fraud and prevent errors from occurring that could affect the reliability of your financial reporting. All of the work that goes into SOX compliance contributes to this goal—SOX’s main purpose. It also contributes to protecting the company’s and top management’s reputation.

Introduces efficiencies. With a SOX program tailored for your company that integrates with your workflow, ongoing pain points will be eased and simplifying of controls will be achieved.

Gains trust in the marketplace. Whether your company has always instilled a sense of financial integrity or only now is shoring up its internal controls, potential stakeholders will know they can rely on the information you are sharing with them—and that can have a positive effect on your valuation.

Tips for Creating, Maintaining an Effective SOX Compliance Program

You may be wondering, how do I set up or improve a SOX compliance program? This post highlighted many of the challenges along with the benefits of taking on SOX compliance. SOX experts can help from the very beginning, even before your company is ready to go IPO and also be there when it’s time to bring in your external auditors to meet your SOX 404(b) requirements.

By working closely with SOX experts who have helped a wide range of companies, in various stages of SOX compliance, you can establish a workable, practical SOX compliance program that can be effectively maintained year over year. We’ve helped companies design, document and execute controls, often during a time crunch.

For an assessment of your program or the start of a SOX 404 compliance program, reach out to our corporate governance pros today.

Sarbanes-Oxley compliance has come an incredibly long way since the corporate governance law was passed nearly two decades ago. That doesn’t mean startups are in a hurry to become SOX compliant. Still, for a high-growth startup that may one day go public, its SOX-like compliance efforts can give assurance to management and investors that the company’s financial reporting can be relied upon.

What makes SOX compliance more clearly beneficial, compared to the early days of the anti-fraud law, is the significant financial operational efficiencies that open up when companies assess and tighten up their internal controls over financial reporting. With the help of financial integrity experts, they can realize such efficiencies as they start understanding and documenting their internal controls.

As your early stage startup contemplates the future, including potential exit strategies, what would you need to do to become SOX compliant?

SOX Compliance for Startups

Tip 1. Firm up your financial foundation. Your emerging growth company’s venture into the public markets might seem far away. Strategic opportunities can unexpectedly arise, however, in the form of a SPAC (special purpose acquisition company) merger, accelerating your company’s need to be IPO ready or SOX ready. Despite whatever strategic plan is in the works, the financial foundation of your startup should be sound so that you have the level of financial information and analysis needed to confidently move the company in the right direction.

Have investments in technology kept up with the size and complexity of the company and where it’s headed? Are your accounting processes practical and leading to timely, credible financial reports that are auditable? Do you have access to the kind of strategic financial expertise required to help you move the startup forward?

Tip 2. Keep current on your key risks. As your startup quickly moves ahead, your risk management efforts need to be adjusted. Risks change as the markets change, as new employees are brought in, as the economy shifts, and as customer demographics evolve. A large part of SOX compliance involves understanding the current major risks facing the company, so risk management for IPO-headed startups is also important.

Tip 3. Seek expertise early and often. Whether your company needs a version of “SOX lite” right now, an idea of whether it’s headed in a smart direction in its growth journey, or simply some expert advice, you need the right expertise to help you. Amid fast growth and your assessment of your high growth startup compliance, you’ll likely find that you need more insights than you can find in-house.

You’ll need to connect with experts who will adjust their guidance to where your startup is right now and then will be there with relevant solutions as those needs change. Seek out a finance and accounting consulting firm that understands emerging growth companies like yours as well as the version of the company you hope it will become.

Do the consulting firm’s experts have experience in your industry, with companies like yours? And if they don’t, how can they meet your needs? Look for a consulting firm that tailors its solutions to their clients rather than trying to bend a company toward its solutions.

Tip 4. Be prepared to act like a public company. Does your team have the skills and resources to meet the ongoing financial reporting demands and SOX requirements of a newly public company? The deadlines are not flexible once your company goes public, and the scrutiny is higher. Pre-IPO companies can ease into meeting the higher expectations by truly understanding what it takes to act like a public company, including SOX 404 compliance and all that entails.

Some of the main internal controls that a public company is expected to adopt are simply best practices that every company should be doing, such as segregation of duties. Undertaking good habits as early as possible can minimize the risk of a material misstatement of the financial statements.

Tip 5. Communicate with your external auditors. Here’s a tip that not everyone intuitively realizes is a possibility: You can proactively check in with your external auditors to understand their expectations.

SOX experts can help you keep these communication lines open, while retaining independence between your startup and the auditors. This way you can understand what auditors want to know and minimize any back and forth that would require your attention. After all, you have so many other responsibilities besides SOX compliance for startups.

How Does Sarbanes-Oxley Affect My Startup?

You may be wondering, “How do I implement SOX in my high-growth startup?” The short answer is startups do not have to be SOX compliant until they are public. Depending on your current growth plans, however, you could find that your startup should work toward becoming SOX ready. To set the wheels in motion, reach out to SOX and financial integrity experts who can help guide your company through what you can and should do now, based on your current growth plans.

Getting a small business or startup past the two-year mark is just one of many promising milestones. So many young companies fail early, so passing certain goalposts can be gratifying to the owners and entrepreneurs of an “emerging growth company,” a fast-moving business that may be venture backed or will soon seek significant funding. How can you ensure a bright future as you build your business? Here are a few strategies that have worked for others who have successfully built a business.

The Basics of an Emerging Growth Company

There are various definitions of an emerging growth company. The most prominent comes from the U.S. Securities and Exchange Commission, which considers an emerging growth company to have less than $1 billion in total annual gross revenue in its most recent fiscal year. This qualification allows a pre-IPO company to follow reduced disclosure and reporting requirements for its registration statement with the SEC.

Another way to characterize an emerging growth company is by its stage in the business lifecycle. An emerging growth company not only shows promise, it is in the process of developing or solidifying a strong foundation on which to further build the business.

Still running on minimal resources, it’s received some validation from investors and customers, and it may or may not go public one day. The business is moving at a fast clip and probably wants to get on more solid footing. It’s around this time that leaders of the company realize they could use some help with understanding their business and how it’s performing. There are strategic decisions to be made, to take the company in the right direction, but any moves need to be based on timely, reliable financial data and what that data means.

The company may not yet be ready for a full-time CFO at this point, however. An outsourced accounting team with a part-time controller could be the right fit for getting the finances in order and gaining a better understanding of the business. Are the current plans realistic? What do we need to adjust in order to reach our main goals?

When companies are first starting out, really early on, there may not be much of a plan—more of a hope to explore if a tech innovation can turn into a marketable product. Or the start of a potentially life-saving drug that will need full funding and interest to get it through the development phases. Such companies start out by just getting by with minimal resources for completing payroll, recording transactions, and paying the bills. As the company builds up, however, the need for a different level of financial expertise quickly becomes clear. Establishing finance and accounting processes, getting on the right systems for the company’s size and complexity, and having CFO-level expertise when needed as the company prepares to seek funding are all steps toward  building a successful emerging growth business. These are steps for moving beyond the “building a startup” phase toward a brighter future.

The Essentials of Building a Successful an Emerging Growth Company

Is your emerging growth company prepared for the changes ahead? Do you wonder “How do I properly build my company?” or “What are the best ways to grow my business?” Start off by considering if you have some of the essentials:

  • A tailored plan for growth—that takes into account your talent, your goals, and where the company is at this moment
  • A tech stack of integrated applications (including software for accounting, payroll, expense management) to keep your financial operations running smoothly
  • Senior level financial expertise that can offer timely guidance as the company pursues growth plans or goes after funding
  • An honest, practical understanding of the business performance and forecasted future

Financial Reporting Requirements for Emerging Growth Companies

The expectations of an emerging growth company expands quickly once it pursues either debt or equity funding. It may need a higher level of financial help as it brings in more people and more talent to meet rising customer demand, ramp up sales and marketing efforts, or pursue an acquisition. While the company scales up, it also requires more structure and an understanding of whether and how it can keep up the pace with the resources it has and is planning to take soon. The company’s growth depends on making the right decisions.

Its financial reporting efforts need to be robust for the sake of decision-makers but also for its growing circle of stakeholders. Lenders will likely want to see audited financial statements, for instance, and the company would have to embark on a long and potentially complicated process to get that first audit complete. Many inquiries are likely to follow, so you’ll want a dedicated expert around who can support the company during the audit process, so everyone else can focus on their day jobs.

How Do You Build a Successful Business?

The million-dollar question any new entrepreneur wants to know: How do you build a successful business? Those who have done it know that it’s more than the product you sell or the idea you come up with. Your company could have the greatest, most unique idea for an app that every American will want to subscribe to over the next year. But, as your company considers adding this on to its portfolio, will it be able to keep up with demand? Does it have the capability of forecasting how long that demand will last? If your outlook is unrealistic, you could be setting up the company for a lot of disappointment—and disappointed users.

Make sure you have the information you need, exactly when you need it. When it’s time for your emerging growth company to further develop the finance function, bring in more finance and accounting expertise, and lean on growth consulting pros, you know where to reach us.

Every company has a unique journey. They move super-quick at times and then slow down to make their way over obstacles. All the while, they’re chasing after certain milestones that keep them moving forward.

Anytime they reach a milestone—a hard-won funding need, a transformative transaction like an IPO or acquisition, or a strategic shift—it’s a notch toward the next stage in their lifecycle. As finance and accounting consultants who work alongside some of the most exciting, fast-moving companies in and around Silicon Valley, we love when these great moments happen.

Fortunately many of our clients have had recent reasons to celebrate noteworthy achievements. These are just some of the recent wins these fast-moving companies have scored along their journey. Congrats!


Our Brisbane client is making strides in their quest to treat peanut allergies. In May, the biopharmaceutical company announced a patient has enrolled in the third phase clinical trial for their investigational biologic product.


In San Jose, data warehousing company closed $15 million in Series B financing. They plan to use the funds to scale go-to-market and customer success programs. Smart thinking!


For this Costa Mesa company, $20 million in proceeds from a recent sale of Series E preferred stock will go toward the continued development of cannabis-based therapeutics that could alleviate certain medical conditions. (Learn more about Nemus with our project profile, “Remote accounting aces for Nemus Bioscience.”)


This Emeryville biopharmaceutical company will have access to more investors because of their inclusion in the Russell Microcap Index. They’re in the process of commercializing Avenova, an eye-care product.


This medical device company in San Jose recently landed $76.5 million in Series C funding. They are scaling up for the commercial launch of their dialysis system.


It’s a done deal for this Mountain View media and analytics company after they completed the acquisition of mobile marketing and advertising company Cris Media. They have their eyes on what is predicted to become a $19 billion shopper marketing market by 2020.


Our Sunnyvale client raised $40 million in funding to support their accelerating growth in the enterprise video conferencing and calling services market. 


This San Francisco company secured $13.75 million in Series A funding for a software platform that eases and facilitates access to life-saving cell therapies.

It’s always thrilling to help smart, innovative companies as they make their mark, meet their milestones and advance in their journey. Congratulations to these fast-moving companies!


The sound of a large public company hitting the wall can be deafening—i.e., a front-page news story or a radical stock drop. Or it may occur slowly, almost silently over time, perhaps from stealthy competitor moves, a slower pace of innovation or hundreds or thousands of employees trying to adjust to strategy shifts and confusing directives. No matter what the reason for the disruption, the finance team, sometimes with the help of outside experts, plays a major role in the enterprise’s ability to dust itself off and reinvent itself for the future.

Big changes at a mature enterprise—growth spurts and turnarounds or spinoffs and restatements—definitely put a strain on finance teams. It’s a time when what’s needed most is tenacity and the ability to shift gears, to help guide the company through the trouble spots and keep it on course.

After all, the finance team plays a critical role in crafting the company’s future. They intimately know the ins and outs of running the company, along with the history. If they are fully staffed with the right mix of talents and skills, they can pave the way for the true business strategists to make sound decisions based on thoughtful, practical analysis of the team’s robust data and intelligence. The team’s wisdom can really influence the decision making.

Coping with growth and complexity

Mature companies need to continually evolve their product lines to survive. It may be time to reach out to new markets—or risk losing market share. The competitive atmosphere changes rapidly, and they must be nimble to adjust to new realities.

One major issue for companies during times of fast growth is finding the talent they need. Companies can bridge the gap by bringing in sharp consultants to help them get through a growth spurt. One-time transactions can knock the wind out of a team and the workload can be daunting. That’s when experienced consultants can be extremely useful to pick up the extra load, manage velocity and augment the staff with specialized expertise.

Coping with a downturn

At some point, a deceleration typically happens. The natural nimbleness of the startup phase is long gone, rapid growth is no longer a given, and the hard-fought battle for the IPO or an acquisition has already played out. A bunch of employees might be heading for the door. A shift in strategy is causing chaos among hundreds or thousands of employees, and there are complex global product lines to manage. Companies trying to stem the tide of departing employees can fill the gaps using interim consultants, such as an outsourced controller, accounting manager, SEC reporting maverick or other savvy finance pro, who can help the business move forward.

This is the mature enterprise stage in the business lifecycle where the ups and downs of staying relevant and gaining ground are challenging. The challenges have grown along with the company’s maturity and complexity. The reporting, compliance and regulatory issues are piling up, along with the ever-increasing demands from the board and investors. The finance team feels the pain firsthand and leads the way by rebalancing the business plan, cutting expenses and extracting efficiencies from every process. The team has years of transactions and data to mine, and sharp analysis and insights are critical to help the company stay afloat and turn itself around.

Consider some of the big ways that the enterprise can fall off course:

  • Shifting regulatory environment: Companies must stay on top of changing compliance and regulations in their space. For instance, implementing a huge new accounting standard (like the new revenue recognition rules or leasing rules) usually is a multi-year effort involving various systems and teams from different departments.
  • A spin out: A divestiture can pack a wallop to internal finance teams as well. “When a large company takes on a complex transaction, like we did with the divestiture of our information management business, it requires a lot of support,” Maddy Gatto, corporate controller of Symantec, a RoseRyan client, told us. Indeed, the finance team of an evolving company often commissions the services of multiple consulting firms and advisors at the same time. It can be a complex challenge to manage those partnerships and make the most of their assistance.
  • A messy restatement: If internal controls aren’t tight and financial reports can’t be trusted, a restatement may result. Yikes! Frankly, this would be a disaster for any company, and a PR nightmare. Maverick corporate controllers can ensure reliable reporting, and SOX experts can get the company through the compliance needs.

Onward and upward

Keeping to the status quo is not an option for companies at any stage. Massive change is inevitable. When it’s time to pivot, the finance team has a chance to shine. By adding in specialized finance experts as needed to help them navigate the tough spots, a company’s finance team can breathe easier. They can together discover the path forward, make the company more efficient and hopefully raise the valuation of the company.

Whether it’s coping with a wild upswing or a dramatic downturn, the finest finance teams move into swift action to get through it.

Not yet at the mature-enterprise stage? See our blog posts on handling the balancing act of the startup, managing through rapid growth and accelerating through on an IPO or M&A deal.

Maureen Ryan, vice president at RoseRyan, heads up business development and helps companies calm the chaos. From meeting with hundreds of companies of all sizes and types, she has seen the emotional rollercoaster of the business lifecycle first hand. Maureen has seen the ups and downs during her early career in various engineering, sales and marketing roles. She’s held positions at Nortel Networks, Bay Networks, Quantum Corp and General Dynamics.

Companies that have made it past the startup stage and are growing like gangbusters have beaten the odds. They’re not only surviving but making it. They’ve branched out their customer base and perhaps their geographic reach. They’ve upped their production, they have a small group of loyal investors, and their earnings are going upward. But for how long? How long can organic growth get the company to where it wants to go?

At some point along many companies’ lifecycle, the growth plan turns into an acceleration plan. They want to expand—and usually fast. Either they know things will slow down without action and it’s time to make a strategic move. Or they need a boost to widen the intense gap between them and their competitors. It’s time for a transaction. A big one.

When a jolt of growth is needed, whether that’s a capital infusion, an acquisition of fresh talent or something entirely new (like intellectual property), thoughts turn to going IPO or making an M&A deal. And that’s when things really speed up. Smart companies on the IPO track take a hard look at themselves, to be sure their own financial house is in order (so key to a proper and favorable transaction). Acquiring companies put on their due-diligence hats and delve into the details of their target business.

The focus in either scenario is usually pretty narrow, with the eye on the final prize—a done deal, a successful transaction, a sigh of relief. But really the work, the drive forward, does not end. For teams that have never gone through such a process before, that narrow view may be all they can handle on their own. They do not have the experience—or the bandwidth—to think about what comes next.

Companies at this stage bring on experts who can get them through the prep and details of the transaction. The smart ones also give consideration to the time after the deal is done. How will the combined companies in the M&A deal mesh? How do they keep the business trucking along while also setting a smart foundation for the new entity?

For IPO-bound companies, the post-transaction time needs to be folded into the planning. Does the company need to bulk up to take on tighter reporting deadlines and increased investor (and possibly, regulator) scrutiny? How can the company ease the culture shock that will certainly hit as the company transforms into a transparent entity that is subject to new regulations? The more planning that can be done up front, the easier the after effects will be.

Just as the needs and resources of their companies evolve as they get bigger, so do the needs and resources of the finance teams and the CFOs who lead them. They self-assess and evaluate to see whether they can keep up with evermore demands and expectations as the company goes big. Where are the skills gaps? Can we stay on top of the changing accounting and regulatory rules with a more complex organization? Will the CFO be able to handle the spotlight post-IPO and rally the troops during the rocky transition? Can the organization handle the many internal demands when integration of a merged company may take awhile?

The questions will vary depending on the transaction at the time and the team on hand. But they are worth asking when a deal is imminent. The earlier, the better when a large transaction is in the near future. When you don’t know the right questions to ask, it’s time to turn to seasoned pros who do.

Chris Vane is a director at RoseRyan, where he leads the development of the finance and accounting firm’s cleantech and high tech practices. He can be reached at [email protected] or call him at 510.456.3056 x169.

If the startup stage is all about surviving, the next phase of a company’s lifecycle, when it is time to really grow, is all about scaling. Once you’ve made it past the viability test, you’re riding the momentum of rapid growth. The company has come out of the gate firing on all cylinders, putting the entrepreneur’s brilliant idea into action and trying to scale as it continues to raise funds, connect with customers, hire talented people and establish its worth in the marketplace. There’s pressure to move quickly, to get noticed and fend off any competition, but there’s also risk in this pressing need for speed.

A major part of maturing and progressing smartly out of the start stage is managing resources to support the growth. Building an infrastructure for growth that doesn’t materialize can spell disaster. A young company with all the potential in the world can skid off the rails if they’re letting loose with spending. Overly confident that sales will come in—some day, any day now—the company could end up with bloated inventories, mismanaged resources and employees with nothing to do.

On the flip side, underestimating growth can be equally calamitous. Not having enough inventory on hand will send customers running to the open arms of the competition. And not having the people needed to properly process orders, support much-needed upgrades and meet customer demands will require an extremely difficult recovery to your good name. By applying the right set of finance smarts and business acumen to manage and predict growth with intention, the company can minimize the risks of burning out employees, setting up unrealistic expectations with lenders and investors, and losing sight of their cash flow amid conflicting revenue and spending goals.

Senior-level financial leadership can bring some much-needed order to the company so that it can progress at the right growth trajectory to match the strategy and end game. They can also direct focus onto the future, laying the groundwork for whatever is in store for the company. It is usually at this strong growth stage when a company brings in more reinforcements to supplement the finance team and hires its first full-time CFO. A seasoned finance pro can help steady the ship, to keep the company moving at high velocity but with a plan in place that is thoughtful and deliberate.

NatureBox, the Silicon Valley company that delivers smart, delicious snack packages, was moving at lightning speed when we sent in an interim CFO and an accountant to shore up ranks. At the time, its fledgling finance team was understandably struggling to keep pace with the explosive growth underway. And demand for NatureBox’s products was fierce. We helped out with extra hands to keep up with day-to-day accounting and also got them ready for the future, putting practical processes into place, prepping them for their first audit and providing strategic insights into key areas of the business.

Once set up properly, the finance team at a fast-growing company is poised to provide the full perspective that’s needed to successfully advance. Until then, the decision-makers may have had disparate vantage points, focusing only on their piece of the puzzle. The well-led finance team can put it all together and dig into the meaning of all the numbers and how they are connected. With a cohesive view, the direction of the company can become clearer and the company can prepare for what’s next, whether that next move is an IPO, an acquisition or whatever is behind door #3.

Avoid erratic moves that force the company into the slow lane. Bring some order to the chaos. Be realistic about the growth rate of your company and make solid plans to support it.

RoseRyan helps companies across the lifecycle, from when they are starting out, growing like gangbusters, expanding through M&A or IPO, and evolving as a public company. To find out more about the lifecycle stages, go here.

Pat Voll is a vice president at RoseRyan, where she mentors and supports the dream team, and heads up client experience, ensuring all our clients are on the road to happiness. Her article about creating a winning culture in the midst of the talent war was recently published in Accounting Today. Pat previously held senior finance level positions at public companies and worked as an auditor with a Big 4 firm. 

“Business, much like life, is not a movie and not everyone gets to have a storybook ending.” Those were the farewell words of Gigaom founder Om Malik after the San Francisco tech website shut down earlier this year, unable to pay its creditors.

Every startup is its own unique opportunity, but so many are cut short. Few of them make it through the first stage of the business lifecycle when they start their engines. Their runway comes to an abrupt halt. The future becomes bleak and they have to fold up shop.

It can be a struggle to avoid such a fate, for sure, but starting out can also be a very exciting time in the company’s lifecycle. There are so many directions the company can go in, so many dreams that can be dreamt (IPO!)—and so many nightmares that need to be avoided.

The first stop along the business lifecycle is the “start” stage
Having worked with more than 700 companies at all stages since 1993, we have picked up on a natural trajectory that occurs. The first stage of a company’s business lifecycle, the start stage, is a balancing act, as RoseRyan CEO Kathy Ryan noted in a blog post earlier this year. It “involves balancing the fight for survival with getting the small business up and running,” she wrote.

In fact, it is a critical time in a company’s lifecycle. A winning, sellable concept can take the company only so far, whether you’re building a business based on the potential of a life-saving medical device or creating a time-saving app for enterprises. Key to survival is the foundation it’s built on. It’s built in this earliest stage, when the future is unclear but decision-makers need to get their heads around their burn rate and the company’s viability.

An unwieldy finance function—or a nonexistent one—can lead to avoidable mishaps, including cash flow problems, misstatements, inefficiencies and distracted senior leaders. Senior leaders should be focusing their energies on attracting new customers and investors—not spending all their time trying to make sense of spreadsheets that appear to have contradictory findings about the company’s performance.

Figure out your financials and other business performance metrics
Managing the finances and business metrics are not always considered a top priority in startups, but they need to be or there’s a real risk the company will spin out of control. Many startup companies cannot afford dedicated resources to perform these tasks, so they may want to consider outsourcing their CFO advice, bookkeeping and accounting tasks. They may also want to tap outside expertise to help them plan for the long term. At a minimum they need to know and understand what the business is doing at any moment in time.

Many of our clients have found that interim finance is just what they need. RoseRyan worked with cleantech company HydroNovation, for example, from its early days to when it was acquired six years later. We got their accounting going, set them up with efficient workflow and produced informative reports to ease their decision making.

We are similarly working closely with development-stage company Nemus Bioscience. We set up their accounting infrastructure and handle the company’s transactional activities, including monthly financials, accounts payable and payroll. And we also have filled in their resources gap when they needed to take on a big transaction.

When to build up the finance team
For the finances at companies in the start stage, there’s a lot of building up and setting up for the next stage, which is the growth stage. Will the systems being put in place scale as the company grows? Can they accommodate huge changes? Does the company have the metrics needed to see how a change in the business model will pan out? When will they know it’s time to ramp up hiring? A strong financial backbone will give the senior leadership visibility into the true performance of their baby. They can see how the company is truly doing and decide where it needs to go.

The beginnings of a full-fledged finance team, whether it’s a mix of part-time and outsourced help or a full-time operation, is a recognition that there’s a shift in the business to the next stage. It starts to form when the entrepreneurs step out of their idea-generating garage and realize they can no longer do everything on their own. They begin to accept that they can’t stay mired in the nitty-gritty details. If your company gets to this stage, congratulations, as you have made it through the start stage and are entering the growth stage.

RoseRyan helps companies across the lifecycle, from when they are starting out, growing like gangbusters, expanding through M&A or IPO, and evolving as a public company. To find out more about the lifecycle stages, go here.

Stephen Ambler is a director at RoseRyan, where he manages the development of the firm’s “dream team” of consultants. His interim CFO stints at RoseRyan have included a social media company and the management of the financial integration process at a company acquired by Oracle. He previously held the CFO position for 13 years at Nasdaq-listed companies.