Taking their company public is a goal of many founding entrepreneurs. Doing so, however, is no easy task. There are many important considerations entrepreneurs must take into account as they prepare for an initial public offering (IPO). Our fireside chat series, “Going Public in Canada,” provides a forum for established entrepreneurs and lawyers to discuss some of these considerations.

In our most recent session, host Chris Wolfenberg, Partner at Dentons Canada, and guest Chris Buckman, Founding Managing Director at Endeavor Canada, discussed accelerating growth to position your company to go public. They described the process as a transition from start-up to revenue-generating, and outlined three considerations entrepreneurs must make.

Focus on sales to accelerate growth

While focusing on sales to accelerate growth is seemingly an obvious strategy, it is easy to be distracted by other glamorous metrics when managing a start-up. Sales should be the top priority, regardless of a business’ stage or intention to go public.

Start-ups should consider undertaking two sales-focused strategies to accelerate growth. First, start-ups should hire top sales performers and identify advisors with strong sales experience. These high-performing individuals can significantly impact growth, especially early in the business’ lifecycle. Second, start-ups should consider entering international markets with greater potential. The United States is an obvious choice for Canadian start-ups. Other markets, however, should also be considered depending on your product or service. Entering international markets can be done without relocating operations, as technology has made remote sales an effective option. Moreover, remote work policies facilitate the option for local employees without the need for physical offices.

Build structurally to scale growth safely

While high-performing employees and new markets can exponentially increase growth, a business must be scaled by continually building its foundation. You simply cannot operate the same way with 1,000 employees as you did with 10. Your business’ needs will change, and so must your behaviour. To scale safely, you must implement practices and procedures that will help manage growth. Examples include adequate operating systems, communication software, and productivity applications.

Consider your capital structure and capitalization table early

Finally, you must consider your capital structure and capitalization table as you scale your business and prepare for an IPO. Your capital structure will impact your ability to raise capital as your business progresses through fundraising rounds. You should organize your capital structure with the goal of further growth. For example, a single class of common shares may be preferable from a governance and shareholder agreement perspective. However, venture capitalists or large private equity investors will want preferred shares and alternative structures.

Your capitalization table, on the other hand, can be considered later. The right time to think about it is when there is either a cheque on the table or the prospect of one. At each successive fundraising round, you will have to review the structure of your capitalization table. This will be a negotiation with the investor and will depend on your location in the growth cycle, the revenue you have generated, and your valuation expectations. As a founding entrepreneur, you may dislike dilution. But it is important to recognize it is a necessary element of growth. Balance is key – you do not want to give up too much of your company, but you want the right investors at the table.

To learn more, watch the fireside chat here.

Other important considerations have been discussed throughout our series “Going Public in Canada.” To learn more, please visit our Going Public in Canada resource centre, or reach out to one of our professionals in the Dentons Canada Securities and Corporate Finance group.