Are you looking to raise funds before going for an IPO? We can help.

Pre-IPO fundraising is the approach to raising funds and capital before a company goes to public listing on a stock exchange. This funding stage helps companies in enhancing their financial position, building credibility, and getting operationally ready for their Initial Public Offering (IPO) journey.
​

The timeline and period for pre-IPO fundraising generally lasts from 3 to 6 months. This relies on deep dive due diligence, investor negotiations, and adherence to regulatory compliance. Planify ensures a streamlined efficient process to accelerate timelines without compromising quality.
​

Pre-IPO fundraising allows companies to bolster their financial stability, scale operations, and meet regulatory necessities required for a public listing. It also helps businesses to build market credibility, attract valuable investors, and improve valuations. Raising funds at this stage, companies can ensure a smoother and seamless transition to the IPO process along with leveraging the expertise of strategic investors for long-term growth.

Once pre-IPO fundraising is done then companies normally focus on making right use of the capital primarily to repay existing debt, expand operations, or related to general corporate purpose and prepare for listing on the stock exchange. This stage involves ensuring adherence to compliance with regulatory guidelines, conducting roadshows to attract potential investors, and maintaining corporate governance with public market standards.

At Planify, we support companies post-fundraising throughout by providing essential strategic advisory and investor relations services to assist them efficiently navigate the IPO process.

The taxation of pre-IPO fundraising relies upon the type of investors involved or concerned, the nature of transactions, and the holding period of shares. For investors, capital gains tax applies when profits are realized for the duration of the eventual sale of shares. Companies raising funds must also account for applicable transaction taxes and compliance with securities regulations. Our platform provides support to tackle any sort of guidance to investors in managing tax implications within pre-IPO fundraising.
​

The main difference between the two represents in their purpose:

Pre-IPO fundraising entails raising capital privately from selected institutional and accredited investors before a company goes public and beyond. It primarily entails securing capital and enhancing financial and operational stability in businesses, improving valuations and preparing companies for a seamless continuing transition into the public market. whereas,

Initial Public Offering(IPO) involves the procedure when a private company is going towards listing on the stock exchange and offering shares to the public for the first time. In overall brief terms, pre-IPO is about making the company ready for significant growth, and IPO marks the company’s transition to becoming publicly traded.

Pre-IPO fundraising lays a groundwork that leads companies paving towards a successful IPO. It helps in stabilizing financials, attracting strategic investors, and enhancing the company’s valuation. It also demonstrates operational readiness to potential shareholders, builds market confidence, and aligns the business with public market expectations. However, effective planning is essential to manage share dilution and ensure a smooth transition from private to public markets.
​

Founders should consider pre-IPO fundraising when their company is in need of capital to meet IPO listing requirements, scale operations, or enhance brand visibility in the market. This stage is ideal for onboarding strategic investors with industry expertise and market credibility. Our platform facilitates founders to determine the ideal approach for pre-IPO funding & company’s readiness for its upcoming public listing.

Due diligence is truly an essential part for pre-IPO fundraising. It guarantees transparency and fosters trust among potential investors. This procedure includes various tasks conducted properly such as assessing a company's financial results, operational efficiency, leadership quality, and governance standards. Our platform provides access to comprehensive due diligence reports and a structured checklist that position companies as lucrative investment opportunities.
​

During pre-IPO fundraising, companies must comply with all required securities laws, ensure transparent financial disclosures, and observe SEBI regulations. This procedure regarding meeting the compliances include preparing accurate financial statements, addressing investor agreements, and aligning with corporate governance norms.
​

Pre-IPO fundraising represents certain risks and concerns like ownership dilution, valuation misalignment, and market uncertainties all of which are carefully managed. Founders may additionally face reduced equity control as shares are distributed to new investors. Moreover, fluctuating market conditions could impact the timing and success of the subsequent IPO. Planify mitigates these risks by aligning investor expectations with the company’s goals and providing robust valuation and strategic insights.