If you work with folks who look to advise companies considering going public, it is of course important to ensure that they have good experience in doing so. Therefore, I believe two simple questions have to be asked of anyone you might bring on board to assist: How many companies have you advised that have gone public? And can you allow me to speak to the last three CEOs that you advised that completed the process?
Note this is a little different than the usual request for a few references (which you should also do). I think you want to see how things went in the most recent deals the advisor has worked on. It also gives you a sense of how recent those last deals were. In addition, it doesn’t let the advisor choose whom you speak with since you just want to deal with the last few deals, however they went. If there is any resistance in providing these contacts, be very wary.
Learning how many deals the advisor has successfully completed is also important. Too many people holding themselves out as advisors have very low “hit ratios,” meaning they try but fail to complete too many deals, and often take fees up front regardless of success (more about this later). The best, of course, is an advisor who has completed many deals and whose last three deals, all within the last few years, led to satisfied CEOs.
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