This is a chapter from The Bundle: issue #2 - the IPO special. Download The Bundle to hear from legal leaders from Wise, Trustpilot, LendInvest, UiPath and more, sharing their IPO stories.
I always knew that the company planned to go public someday, and was excited at the opportunity to dive into such an intense project - but I’m also a risk-averse lawyer, so there was definitely an element of apprehension too, especially as our timetable for this IPO was deliberately aggressive.
We started work on the project in April 2021, with the aim of listing three months later. I was actually on maternity leave when plans to start work on the project kicked off. Eager not to miss this opportunity, I returned to work early and rolled up my sleeves.
It was clear that being a mother to a baby and a toddler, and simultaneously leading a company to an IPO for the first time, wasn’t going to be easy. But the benefit I had was that I knew exactly where to begin and had a brilliant and enthusiastic team - both at work and at home!
Our top priority, as it often is for a legal team, was delivery. Getting ready for the project involved answering key questions around how we planned to deliver the project, what the risks were to deal execution, how we foresaw and mitigated those risks, and how we would resource these plans.
Finding the answers to all these questions was step one - and as I hadn’t worked on anything at this scale before, I relied heavily on my network.
I spoke to other GCs at high-growth companies that had been through an IPO, and I also spoke to a few lawyers in private practice. We then ran a RFP process for the law firms that would support us through this project.
“An IPO is just another transaction, and that was how I approached it. But I hadn’t anticipated the sheer volume of everything, from legal documents to tasks on legal’s ‘to-do’ list”
Finding the right problem-solvers 🔎
The main focus for me, given that our timetable for this IPO was so aggressive, was finding an external counsel with whom we could create really strong relationships. It was important to me that I could pick up the phone to discuss a problem or concern, and that we were able to work closely together to bring this project to a close.
The tricky aspect of an IPO is not the transaction itself, but the unexpected pinch points that come up along the way. Everyone knows how a transaction is supposed to work; the documents you need, the process you have to go through. It’s a well-trodden path.
But the challenges that you can’t anticipate are the ones where you need to lean on your external counsel, and the ones where it becomes clear whether you’ve made the right choice in law firm or not.
As a stretched GC, you also want to find external counsel that don’t need handholding; they need to be reliable, resourceful, and have a problem-solving mindset. I wanted a firm that could listen to the problem, and independently resolve it so I could focus my time on the million other tasks on my ‘to-do’ list.
Fortunately, we found external counsel that met all these criteria; our law firm steered us through any issues we faced, and were superb to work with.
As we went through the process there were a couple of aspects of the job that became clear - and really informed the way legal operated throughout the project. Here are five lessons I learned along the way.
1. IPO volumes exceeded expectations 😱
An IPO is just another transaction, much like a funding round - and that was how I chose to approach it. But something I hadn’t anticipated was the sheer volume of everything, from legal documents, to the number of stakeholders, to the due diligence process, to the tasks on legal’s ‘to-do’ list.
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Unlike a funding round, the stakes for a company going public are much higher, the rules are completely different, and legal’s responsibilities are much greater. The process of taking a company public also entails stricter governance. Essentially, it’s a private investment funding round, but at a massive scale.
2. We’re lawyers, but also coordinators 🤗
Coordinating everyone involved in the IPO was a huge challenge; the project pulled in people from all across the business, and it was crucial that everyone was collaborating to meet all the deadlines. On top of that, we also had to coordinate with all the external stakeholders involved. External stakeholders involved in LendInvest’s IPO included:
- Our legal advisors
- Our nominated advisor
- The analysts
- Their lawyers
- Our new board directors
- The PR advisors
- The London Stock Exchange
- And of course, the investors
It was incredibly challenging trying to coordinate between all these different parties and making sure there were no blockers in the timetable - but also incredibly rewarding.
Our core team of people focused on the IPO was around six people - and then we would bring in up to 20 others as and when we needed them. For the most part, six of us were working non-stop to get this IPO over the line.
3. The lawyer-investor relationship is invaluable 💎
As an asset manager, LendInvest had plenty of experience leading different types of capital raising transactions; we have funds, separate accounts, financial partnerships, retail bonds and RMBS issuances. This meant that we were potentially in a better position for this IPO than a company that isn’t used to raising funds in the way we are.
This also meant that we already had a roster of different investors, and so managing relationships with investors during the IPO was a much easier transition. Legal has always played a significant role in maintaining relationships with our stakeholders, and ensuring we’re getting feedback from them whenever possible.
It’s a key part of governance that plays heavily into our roles as in-house lawyers, and as we gear up for our first annual general meeting (AGM), this experience will be invaluable.
The AGM is an annual meeting we have, to which all of the equity investors are invited. The business updates on financials for the year and key reports on governance. The AGM is a great opportunity for legal to strengthen relationships with these investors - it’s a chance to voice any concerns or problems, but also answer any of their questions.
"Being able to enable the business and allow them to self-serve on information was essential, especially as we would be stretched over the course of the IPO"
4. Becoming a strategic legal team was key 📈
With a huge project comes questions from the wider business. Legal ran several company-wide updates, offering colleagues the chance to ask questions. We also ran focus sessions with smaller groups for the more nuanced aspects of the transaction, where we anticipated many questions from the wider business.
A member of my team would run these with a colleague from finance, and one from tax, to informally discuss the situation and foster an environment where people felt comfortable asking questions.
Over the past few years, we’ve been trying to move towards becoming a more strategic legal team, as opposed to a purely operational one. Being able to enable the business and allow them to self-serve on information was essential, especially as we would be stretched over the course of the IPO.
We created self-help tools and FAQs so teams could find answers to common problems elsewhere before contacting legal, and this approach helped us free up time for more strategic work.
It’s also helped in terms of learning and development - my team has had the opportunity to develop their careers, build on their own experience, and push their capabilities following this IPO. We’re also hiring, which is great recognition of the work we’ve done, but also how the work has changed for us now that LendInvest is a public company.
“When people warn you about the all-consuming workload, believe it! You have no time for the day job when you’re working on the IPO”
5. Believe what you hear! 👂
Looking back, being part of this huge transaction with such an energetic and enthusiastic team has been brilliant. If I had to give one piece of advice to GCs tackling a similar project, it would be: when people warn you about the all-consuming workload, believe it!
You have no time for the day job when you’re working on the IPO, so take your resourcing into consideration well in advance: who will handle the everyday tasks? Is your team well-equipped to work in the background and support the wider business while you solely focus on the IPO?
Do you have enough resource to support this change within the legal function? It’s been a huge year for LendInvest. We executed this major company milestone just weeks after our third securitization of UK prime buy-to-let mortgages, and months after securing another £500m financial partnership with JPMorgan.
It’s also safe to say it’s been an important year for me personally. The remote working aspect helped me spend quality time with my family throughout the process, and not having to commute to an office everyday was absolutely invaluable.
So much has changed over the past year - from the status of the business, to my responsibilities as a GC. And with a scaling legal function in a continuously growing business, I’m super excited to see what we plan to do next.
Ruth Pearson is the GC and Company Secretary at LendInvest. LendInvest listed on AIM in July 2021, with a valuation of £255.6m.
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