What IPO readiness really looks like

After Labor Day, while wearing white might theoretically be off-limits, we frequently see IPOs in full swing—theoretically.

I say theoretically because, while we could see some IPOs in September, there’s very little on the calendar to speak of. This isn’t helped by the growing list of IPO postponements, most recently of Chinese self-driving vehicle startup WeRide , which was initially expected to go out this week. So, right here and now, the market isn’t exactly looking IPO ready. But theoretically, if more IPOs are going to happen this year, it’s going to have to be pretty soon.

"Generally, the corridors of activity are September, February, and mid-April to mid-May,” said Rana Yared, Balderton Capital general partner. “So, it's basically right after you audit the quarter of the calendar year…[and] September is the final push.”

So, in what could be the triumph of hope over experience, I asked Yared and Index Ventures partner Shardul Shah: For a company, what does IPO readiness mean anyway?

To Shah, cybersecurity is now one of the most salient areas of preparation for a company considering going public. (Shah’s responses in this article are taken from a Zoom interview and follow-up emailed responses.)

“The day a company announces it will go public, that company has multiple targets on its back,” Shah said. “Not only should you expect class-action lawsuits if your share price unexpectedly dips, but you are now in the cross hairs for cyber criminals. Adversaries are stepping up their actions—even posing as whistleblowers during a breach.”

Cybersecurity-related scrutiny from the SEC has also been ramping up, as has been the case for regulators across the pond.

“The SEC is taking cybersecurity much more seriously,” said Shah. “They’ve introduced a requirement around the disclosure policy surrounding material events. In Europe, there’s something called DORA [the Digital Operations Resilience Act], which will be enforced next year. Meanwhile, you have chief security officers who are being held accountable for fraud, like SolarWinds .”

So, what’s to be done? For one, companies also need to make sure they have CISOs early, Shah says. And they can’t just be any CISO—that person needs to be the right CISO for that particular business.

“Having a CISO as early as $50 million in revenue is a must,” he told Fortune. “In terms of what makes a CISO the right fit, there’s no one-size-fits-all checklist. A CISO’s ideal background will depend on the business's needs. A CISO with prior experience working within engineering led cultures would be really valuable for a product-led company. A company in a heavily regulated space like healthcare might benefit from a CISO with deep expertise in compliance.”

There then has to be a long-standing partnership built on trust and geared towards transparency, and this point extends beyond cybersecurity. As it turns out, one of the biggest things when it comes to IPO readiness is the sort of thing that may seem obvious, but bears repeating, both for its importance and simplicity: A successful IPO comes down to having the right team.

“One of the biggest things in IPO readiness is that you’ve got to pick your people, you’ve got to pick your management team, because a management team that was really happy to talk to a private board all day long might not be great at communicating with a public market,” said Yared. “Their presentation style may not be all that good, or they’re insufficiently specific on their feet with numbers. If they’re the CEO, the CFO, or the head of investor relations, they really need to understand the pulse of the public market investor versus the private market investor.”

Hope springs eternal, as Alexander Pope wrote. So, perhaps after Labor Day, this advice will be useful to someone. But based on both the long-term nature of the advice itself, and the stilted IPO market, my guess is that this is going to be most useful to a founder who’s looking further out, well past next weekend—theoretically.

Oh, and I don’t know about you, but I wear white after Labor Day.

Elsewhere… Kamala Harris’s campaign has said that she supports President Joe Biden’s economic agenda, which include a tax on unrealized capital gains on individuals with annual income north of $100 million. Tech investor social media has been resoundingly upset about this, but it’s too early to tell how it might play out—in more ways than one.

See you Monday,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Nina Ajemian curated the deals section of today’s newsletter.

This story was originally featured on Fortune.com