The role of a CEO in an IPO
The CEO is the most important job at any company. His importance is magnified when a company goes public. There are several things that a CEO has to do during an IPO in order to make sure that it is successful. Many of these things are part of his regular job but there are a few additional duties as well.
The first role that the CEO plays in an IPO is determining whether or not there will be one. A big part of the job of the CEO is managing the companies finances. He is the one who decides how money will be allocated. It is also largely up to him to determine when and how additional funds will be raised. The actual decision to go public will be made in conjunction with the board but the CEO plays a major role in the decision.
Once the decision is made to go public the CEO's next task is to make the arrangements for it to happen. This means that he will have to find somebody to underwrite the issue and negotiate the terms. This is an important job since finding the right underwriter and getting the right terms will play a huge role in the success of the IPO. In most cases the board will be involved in this decision as well but again it will be the CEO who takes the lead.
Probably the most important role that the CEO will play in an IPO is to promote the company. In large part the success of initial public offering will depend on how well the company is promoted. People by stocks because they believe in the growth prospects of the company. With a company that is just going public there is not a track record that people can use to determine how much the company can be expected to grow. In large part the decision to buy the new issue will be based on how well the CEO promotes his company. Steve Heyer is a CEO who has taken several companies public and he points out that promoting his company is always one of the CEO's most important jobs and it is no different during an IPO.
The last role that a CEO plays during an IPO is to determine the direction that the company is going to go after the IPO is completed. Things are going to change at the company after it has gone public and it is important that the CEO prepare for that well in advance. Planning for the future is a major part of the CEO's job but it becomes especially important in this case. Large sums of new capital will be raised so how it will be used will need to be determined. In addition the CEO will have to determine the new corporate structure of the company once it has gone public.
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