NASDAQ CEO: Concrete goals essential for successful IPOs

Friedman (pictured, right), who previously served as CFO at The Carlyle Group and led the firm’s IPO in 2012, told Intel Capital’s global summit that taking Carlyle public taught her how important it is for a company’s management team to have a vision that can be easily communicated to potential shareholders. 

“Carlyle is a big business, so when we started the process we thought, of course, you need to know everything there is to know about us. So our first presentation to our underwriters was 100 pages long,” Friedman said. “And they said, you're going to have to get it down to 20 pages, and you need to be able to go through your story in 15-20 minutes.”

In addition to a clearly communicable vision for the business, a successful public company must be prepared to demonstrate after the IPO that it can provide consistent returns. While all companies face challenging periods, if a business cannot meet its financial targets within the first year after the offering, investors will be concerned about its future performance.

Even when a company is not quite ready to go public, stock exchanges can still provide liquidity for it and its investors. NASDAQ, for example, created a platform in 2013 for private companies with up to 2,000 non-employee shareholders to set up share buybacks and tender offers and provide existing investors with liquidity, without burdening their time and financial resources. 

The NASDAQ Private Market has enabled share sales for 116 companies since its launch and provided $6.1 billion to more than 15,000 transaction participants. So far this year the market has hosted 40 sales, nearly as many as in all of 2017. Friedman attributes this growth in interest to companies and shareholders coming to appreciate the flexibility it offers.

“Your employees at some point want to be able to buy a house and send their kids to school, and so giving them some access to liquidity as a private company is valuable and it actually helps retain them,” said Friedman. “Also, you may have some early investors that are ready to exit, but you don’t want them to be an early seller after an IPO, so cleaning up your shareholder base is also a good way to use our service.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• IPO
• Performance
• North America
• NASDAQ
• Exit
• Intel Capital