What Happens During The IPO Process? (2026 Updated)

Taking a company public can feel like the ultimate “we made it” milestone - but the IPO process (initial public offering) is also one of the most legally and operationally demanding things your business will ever do.

If you’re considering an IPO in New Zealand, you’re not just preparing a big marketing moment. You’re stepping into a tightly regulated environment with ongoing disclosure, governance and reporting obligations. That’s why getting your legal foundations right early matters so much.

This guide is refreshed to reflect the current IPO landscape and the way regulators and exchanges typically expect businesses to approach disclosure, governance and investor protection. We’ll walk through what happens during an IPO, who’s involved, the key documents, and what changes once you’re listed.

What Is An IPO (And Is It Right For Your Business)?

An IPO is when a company offers shares to the public for the first time and becomes listed on a stock exchange (for many NZ businesses, that’s typically the NZX). In simple terms, you’re turning private ownership into publicly traded ownership.

Businesses usually pursue an IPO to:

• Raise capital to fund growth (new markets, acquisitions, R&D, hiring)
• Provide liquidity for existing shareholders (founders, early investors)
• Build credibility with customers, suppliers and partners
• Create a market value for the company via public trading

But an IPO isn’t the right fit for everyone. The trade-off for access to capital and profile is:

• More public scrutiny (financial performance, strategy, remuneration)
• More compliance and reporting (often with hard deadlines)
• Less privacy and more governance formality
• Potential dilution (your ownership percentage can drop)

Before going down the IPO path, it’s worth pressure-testing whether another capital-raising option fits your goals, like private investment, strategic investors, or debt funding. If the plan is “we’ll do an IPO because it sounds impressive”, it can get expensive fast.

Tip: If your internal structure is still “startup-simple”, it’s often a good time to tighten up your core governance documents like a Company Constitution and shareholder arrangements before you start external due diligence in earnest.

Who’s Involved In The IPO Process?

An IPO is a team sport. Even if you have a strong internal finance function, you’ll usually need a group of external advisers to get you from “private company” to “listed issuer”.

Common IPO participants include:

• Directors and senior management: ultimately responsible for the company’s disclosures and strategy
• Corporate lawyers: structure, documentation, due diligence, disclosures, verification processes
• Financial adviser / investment bank (lead manager): pricing, marketing, bookbuild, offer structure
• Accountants and auditors: audited (or audit-ready) financial statements and accounting policy work
• Registry provider: manages shareholdings and allocations
• Exchange and regulators: NZX (listing) and the FMA (markets conduct and disclosure)
• PR / communications advisers: investor communications and media strategy

One practical thing founders sometimes underestimate: advisers will ask for information at speed, and a lot of it. Having your records clean and consistent (cap table, contracts, IP, employment docs, privacy practices) can dramatically reduce delays and negotiation friction.

And yes - timelines matter. Many IPO steps have strict sequencing, and you’ll often be working in “market time” rather than “startup time”. If you’re ever unsure about how timeframes are calculated in commercial documents, even something as basic as a Business Day definition can affect filing deadlines and conditions.

What Pre-IPO Legal Housekeeping Should You Expect?

The biggest part of an IPO often happens before any public announcement. This is the stage where your company is getting “listing-ready”. Think of it as transforming your business into something that can survive public scrutiny.

1) Corporate Structure Review (And Often A Restructure)

Many businesses need a pre-IPO restructure so the entity going public has:

• clear ownership of key assets (especially IP)
• clean group structure (subsidiaries make sense, intercompany arrangements documented)
• appropriate share classes (or simplified classes)
• proper director and shareholder approvals recorded

This is also when you’ll look closely at how shares have been issued historically. If you’re still refining how equity should be held, allocated or formalised, it’s worth revisiting earlier decisions such as Share Allocation so the cap table tells a clean story to the market.

2) Governance Upgrade (Board, Policies, Decision-Making)

Listed companies are expected to operate with stronger governance than a typical owner-operated business. That can mean:

• appointing independent directors
• establishing board committees (for example, audit and risk)
• documenting delegations and approval thresholds
• updating constitutions and shareholder processes

It’s common to refresh or replace private-company style arrangements. For example, a Shareholders Agreement might have rights (like vetoes or transfer restrictions) that don’t translate cleanly to a public company environment.

3) Due Diligence (The Deep Dive Into Your Business)

Legal due diligence is the structured process of checking the company’s legal health and risk profile. This isn’t just “a quick review of contracts”. It’s a systematic investigation designed to confirm that what will be disclosed to investors is true, complete, and not misleading.

Due diligence commonly covers:

• Material contracts: customer, supplier, distribution, leases, lending
• Employment: employee agreements, incentive plans, contractor risks
• IP ownership: trademarks, copyright, software code ownership, licensing
• Regulatory compliance: industry licences, consumer law, privacy
• Disputes: threatened or actual litigation, complaints, claims history
• Company records: share issues, registers, past resolutions

If you’re going into a formal due diligence workstream, having a defined scope and process matters - and it’s often easier and faster when handled as a structured Legal Due Diligence project rather than a bunch of ad-hoc requests.

4) Cleaning Up Your Contracts And Employment Arrangements

Investors want confidence that your commercial position is enforceable and your key people are properly engaged. That’s why “informal” arrangements tend to get stress-tested.

Common focus areas include:

• whether key customer contracts are in writing and assignable
• whether pricing and service descriptions are clear (to reduce dispute risk)
• whether contractors might actually be employees (misclassification risk)
• whether key staff have appropriate confidentiality and IP provisions

If you’re standardising your workforce documentation, having a consistent Employment Contract framework can be a practical part of “IPO readiness” (especially when your headcount grows quickly).

5) Brand, Marketing And Public Statements (Yes, This Matters Early)

In the lead-up to an IPO, companies often ramp up marketing and visibility. The catch is that public statements can create risk if they’re inconsistent with offer materials or overly optimistic.

In New Zealand, you’ll want to keep a close eye on obligations under the Fair Trading Act 1986 (misleading or deceptive conduct) and the Financial Markets Conduct Act 2013 (offer and disclosure requirements). The theme is simple: don’t overstate, don’t omit key information, and make sure claims can be substantiated.

What Are The Main IPO Steps From Offer Planning To Listing?

Every IPO has its own structure, but the process usually follows a recognisable sequence. Here’s what you can expect at a high level.

1) Appoint Advisers And Confirm IPO Feasibility

This stage usually includes:

• initial strategy sessions (capital raise size, target investors, valuation approach)
• readiness assessments (financial reporting, governance, legal risk)
• mapping the critical path and timeline

It’s also when you’ll decide what type of offer you’re running (for example, institutional only vs retail participation, or a mix).

2) Choose The Offer Structure (Primary, Secondary, Or Both)

Most IPOs involve one or both of these components:

• Primary raise: the company issues new shares and receives the funds (capital for growth)
• Secondary sale: existing shareholders sell some of their shares and receive the funds (partial exit / liquidity)

These choices affect control, dilution, and the story you tell the market. A primary raise often signals “we’re funding growth”. A secondary sale can be totally legitimate too - but it tends to attract more questions, so disclosure and messaging matter.

3) Prepare The Disclosure Document (And Run A Verification Process)

This is where IPOs get legally serious. New Zealand’s public offers are governed by the Financial Markets Conduct Act 2013 and related regulations, and listings are also subject to the NZX Listing Rules (where relevant).

The disclosure document (often a product disclosure statement and/or other offer documentation, depending on structure) is prepared with input from legal, finance, and the lead manager. The point is to give investors the information they need to make an informed decision.

To support the accuracy of disclosures, IPOs typically run a verification process, where statements in the document are checked against evidence (contracts, board papers, financial reports, customer metrics, etc.). This can feel intense, but it’s there for a reason: misleading disclosure can create serious liability risks for the company and its directors.

4) Submit Applications And Engage With NZX / Regulators

During this stage, you can expect back-and-forth on:

• listing eligibility requirements
• governance settings
• financial reporting history and audit approach
• any waivers or specific rule interpretations (where applicable)

This part often runs in parallel with due diligence and document drafting, which is why the IPO process can feel like multiple projects happening at the same time.

5) Marketing The Offer (Roadshow, Bookbuild, Pricing)

Once you’re in the marketing window, management and the lead manager will usually conduct presentations (often called a roadshow) and gather indications of interest.

For bookbuild-style offers, the lead manager works with institutional investors to determine demand at different price points, then recommends an offer price and allocation strategy.

This stage is exciting - and also risky if communications are not carefully controlled. Make sure everyone knows what can be said publicly, who approves announcements, and how forward-looking statements are handled.

6) Allocation, Settlement And Listing Day

After pricing, shares are allocated, money is received/settled, and the company lists. On listing day, trading begins and your shareholder base changes from “people you know” to “the market”.

At this point, your governance, reporting, and disclosure processes need to be ready to operate continuously - not just for the transaction.

What Changes After You’re Listed?

A lot of founders focus on “getting to IPO”. But from a legal risk perspective, the bigger shift is what happens after listing.

Once you’re public, you’ll typically deal with ongoing obligations such as:

1) Continuous Disclosure And Market Announcements

Listed issuers are generally expected to keep the market informed of information that could materially affect the share price. Practically, this means you need:

• a clear internal escalation pathway for “market sensitive” issues
• announcement approval processes (who drafts, who signs off)
• training for directors and executives on disclosure expectations

If you don’t have good systems, it’s easy to accidentally disclose selectively (for example, telling one investor something before telling the market) or to delay disclosure too long because the business is still “figuring it out”.

2) Financial Reporting And Audit Timelines

Your reporting obligations will increase, and deadlines tend to be strict. This can impact:

• finance team resourcing
• systems and controls
• board calendar planning

Even if your business is already profitable and well-run, the discipline of public reporting is a different operating rhythm.

3) Directors’ Duties And Governance Expectations

Directors of New Zealand companies have duties under the Companies Act 1993 (for example, acting in good faith and in the best interests of the company). In a listed environment, those duties play out with more scrutiny and more formal documentation.

Board minutes, conflict management, and decision records matter more than ever - because if something goes wrong, those records are often the first place advisers and regulators look.

4) Trading Restrictions, Insider Information And Employee Equity

Once listed, your company will need to manage:

• trading policies for directors and staff
• blackout periods (times when trading is restricted)
• how inside information is identified and controlled

This also interacts with employee incentives. If you have (or plan to have) an employee equity plan, it’s worth reviewing how awards vest, what happens on exit, and what the disclosure and tax implications look like in a listed context.

5) Privacy, Data And Public-Facing Compliance

Growth and visibility usually mean you’ll collect more customer and investor data, use more digital tools, and run more campaigns.

That makes privacy compliance a real operational issue - not just a website footer task. If you collect personal information, a fit-for-purpose Privacy Policy and compliant internal handling processes can help you reduce complaint and enforcement risk under the Privacy Act 2020.

Key Takeaways

• An IPO is a transaction and a transformation: you’re not just raising funds - you’re changing how the company is governed, reported on, and held accountable.
• Pre-IPO housekeeping is where most of the work sits: corporate structure, governance, contracts, IP ownership and employment arrangements often need to be tightened before you can credibly go public.
• Legal due diligence and verification are central: disclosures must be accurate and supportable, and directors can face real liability if the market is misled.
• The offer phase involves careful sequencing: adviser appointment, offer structuring, document drafting, regulator/exchange engagement, marketing, pricing, allocation and listing all need to line up.
• Life after listing has ongoing obligations: continuous disclosure, reporting timelines, governance expectations and trading restrictions become “business as usual”.
• Strong core documents help you stay in control: getting your Company Constitution and shareholder settings right early can reduce friction and uncertainty later.

If you’d like help getting your company IPO-ready - from governance and restructures to due diligence and key documents - you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.