Author: Chris Clapp, Director
Rapid growth calls for careful planning and prioritization—and sometimes fast growth means putting non-revenue-generating projects on the back burner. What are the top five considerations early-stage growth companies cannot afford to overlook?
Recruit and retain top talent.
Attracting top talent is key to gaining a competitive advantage that will allow the company to reach the next level. Establish long-term incentive compensation plans aligned with the company’s growth strategy in order to recruit and retain talented resources.
Invest in information systems that align with the company’s long-term growth plan.
Implementing the right business systems helps provide accurate financial data and enables timely financial reporting. Utilize technology such as forecasting and business intelligence (BI) tools to support the company’s infrastructure during periods of rapid growth.
3. Stock Options
Maintain accurate and complete capitalization tables and stock option data.
Growth companies can avoid future complications by accurately tracking company ownership interests, including stock-based compensation and stock option records and activity. Document ownership interests and maintain all related paperwork. Ensure that the company has a capable system and adequate processes in place for tracking stock option grants, exercises, and forfeitures on a real-time basis.
4. Legal Documents
Utilize and retain legal documentation pertaining to intellectual property.
Protecting the company’s intellectual property rights is paramount. Gather signed intellectual property assignment documentation from founders, and enforce invention assignment clauses and non-disclosure/confidentiality agreements with all employees and any contractors hired by the company.
5. Budget Forecast
Ensure proper budgeting and forecasting processes are in place.
Smart growth hinges on accurately predicting earnings and future cash flows. Assess the company’s budgeting and forecasting processes to ensure that the proper people, processes, and technology are in place to predict monthly and quarterly earnings accurately and in a timely manner.
How do companies plan to grow in 2014? Download the full results of our recent study conducted in partnership with FierceCFO, and watch videos of IPO readiness experts breaking down the results at www.morganfranklin.com/IPO.