24 Apr A Chronology of Processes – From Startup to IPO
As defined by Investopedia and the U.S. Securities and Exchange Commission (SEC), an IPO or the Initial Public Offering is a new business enterprise’s very first leap to reach out to the public and raise capital from the masses.
Making the IPO feat is one of the very first omens and milestones that predict a promising future for the business. It is a sure-tell sign that the efforts of the entrepreneur have strengthened the roots and the business venture has reached the stage of fruition.
Making the Initial Public Offer is a dream stage for the budding entrepreneurs. However, it can be based on certain other factors as in the need to raise instant revenue to support or expand the operation.
From ideation to execution, and from startup launch to making the first IPO – the entire process graduates through a progressive series of steps. Here’s an insight into the chronology of processes to guide aspiring and budding entrepreneurs from Startup to IPO.
Purchase Order Financing
While setting up an enterprise, you will have to consider a number of factors other than your own preferences. For instance, you might have to raise the finance bar from $10K to $25K. This is because the other stakeholders such as raw material suppliers and manufacturers have their own specific minimum order requirements and limitations.
Make sure that you have enough finances to accommodate for the first volume order. If you don’t have sufficient funds, opt for Purchase Order Financing from a trusted funding source such as HEA Foundation which is located in the Green Coast.
Develop a Consumable Product
In spite of the influence of technology, marketing and advertising in triggering the customer’s purchase decision, consumers’ perception for certain FMCG (Fast Moving Consumable Goods) products will forever stay unchanged. Therefore, you need to create an exceptional product design that will be acceptable and consumable by massive consumer segments.
“I like to invest in commodities that are predictable like Wrigley’s chewing gum. Technology or the Internet will never change how people chew gum.” – Warren Buffett, CEO of Berkshire Hathaway
Investors like companies where a customer comes back over and over again. They are not a big fan of companies where you sell something to somebody once, and then you have to get a new customer to sell the next thing to.
You can seek product development ideas from Cannaeo™, a company that is manufacturing a variety of groundbreaking hemp-infused products for green conscious consumers. Here are several FMCGs with proven high sales track history:
- Teriyaki Sauce with Organic Hemp
- Hickory BBQ Sauce with Organic Hemp
- Ginger Chinese Chicken Salad Dressing with Organic Hemp
- Mango Red Rasperry Vinaigarette with Organic Hemp
- Papaya Poppy Seed Salad Dressing with Organic Hemp
- Pineapple Marinara Sauce with Organic Hemp
- Bloody Mary Mix with Organic Hemp
Hint, hint: Design a logo, slap the logo and brand label on one of these FMCGs, and there goes your product! A product with historical sales performance, so there’s no need to reinvent the wheel! It’s phantom branding at its finest. #PrivateLabeling
Terms and Policies Insert
Pay special attention to the legal requisites involved and thoroughly examine the clauses in their minutest intricacies.
Since most manufacturers require around 50% up to 60% down payment prior to production, make sure that you include the required clause in your purchase agreement as well. You want to make sure you have a committed client where you won’t get stuck with owing your vendor(s) money for production, if for any reason client decides to pull the plug from completing the full order.
Set Up a Website
Set up a compelling, professional website for your business, with main sections such as Vision, Mission, Core Team, About Us, Product Portfolio, as well as the Core Values driving your business.
Investors conduct a thorough research before putting their trust and money in a new business enterprise. Most of this research is conducted online and your website plays a key role in developing the first impression of your business in the investor’s minds.
Most investors like companies with multi-founders because they can bang things against each other and make decisions as a group. And if they have different skill sets, they can trust each other with the ability to do this and that.
You’ve probably heard the old adage, “Most consumers don’t base their buying decision just from the product alone, they buy the person behind the product.” So with this being said, make sure to identify all of the executive members in the ‘About Us’ or ‘Core Team’ section of the website, because this is the first thing that investors pay attention to: The Executive Team.
Value of Trademark
A trademark does not only prevent copyright infringements, it also adds gravity to the persona of the brand. A trademarked brand or entity stands as more credible in the consumer market, in comparison to a brand or entity with no trademark verification to its claim.
“Any product that is FDA approved is valuable to many potential investors’ interest…”
FDA Approval Principles
The U.S. Food and Drug Administration (FDA) approval process requires the manufacturer to work with the FDA during human trials of products to ensure trials meet rigorous scientific standards, and that human subjects are protected from unnecessary risks.
Any product that is FDA approved is valuable to many potential investors’ interest because they consider it as a long-term commodity; and free from legal scrutiny thus eliminating risk on their investment.
This is vital for any company or establishment that wants to go public!
Build a Brand
Ordering or manufacturing a generalized product won’t provide you a competitive advantage in the market. Sift through your options, request quotes from multiple vendors and manufacturers, launch a unique and highly customized brand in the market.
One surefire way to build a brand is to hire brand models or ambassadors to perform specific tasks such as upload content or share a message on their social platforms like SnapChat, Instagram, Facebook, etc.
Oh yeah, before I forget! Here’s a quick S/O to these ambassadors that helped several of our sponsors extend their brand in the social media realm: Devan Rae, Laura Cervantes, Kristen Shannon, Regan Danielle, and Alanna Lorean, we appreciate you very much.
Now that your product-turned-brand is out in the market, your opportunity has arrived to reap fruits and generate profits. Aside from highlighting the unique selling propositions and value aspects of your product, make sure that you exhibit and maintain a positive cash flow in the market until you’re ready to plunge into the IPO proceedings. This could be a process between 9 to 15 months, so patience is definitely a virtue!
Ready, Set, Go Public!
When you have established a sound market repute and your business is generating a sizeable revenue per annum, it is about time you dive into the pool of stocks, securities, and equity share markets, and make your debut Initial Public Offering.
Hemp Educate America (HEA) Foundation offers counseling and assistance to budding business enterprises operating in the cannabis and hemp industry, throughout the course of IPO processes, and can help them go public for as much as $500k market value and beyond.
About the Author: Carlo Desierto is a serial entrepreneur with over a decade of experience in business startups. He has founded, built intrinsic value, and sold several companies in which he sits as an adviser for the Board of Directors. Carlo has interviewed over 200+ entrepreneurs and published mini-biographies for new digital media channels relating to entrepreneurship, health, self-help, futurology, and the green industry.
This article is a paid content by Cannaeo™, a manufacturing, distribution, and private labeling source for everything hemp-infused and hemp-made products such as active wear, food, skincare, natural supplements, and many more. Cannaeo’s mission is to educate public awareness of hemp’s benefits and its many uses.