How to Think About AI When You’re Planning an IPO

A lot has happened since the IPO surge of 2021. One of the most significant developments is the rise of Generative AI, a technology that can generate new content — everything from computer code to complex images to complete essays.

Companies planning to go public today have taken note. They want to know if this transformative new technology can help them get ready for a public offering. That was the topic of an excellent panel discussion at the recent 11^th Annual IPO Summit, hosted at the New York Stock Exchange.

Moderated by Ranga Bodla, Vice President of Field Engagement and Marketing at NetSuite, the panel brought together DFIN Director of Strategy Justin Nowicki, Connor Group Managing Partner and AI Leader Jason Pikoos, and LinkSquares Founder and CEO Vishal Sunak. 

All the participants agreed that executives must learn about AI. “With Generative AI particularly,” Pikoos said, “you have to invest time to understand how it works, to play around with it a little bit to understand the breadth of ways that it can be used.”

Nevertheless, they advised executives planning an IPO to take a measured approach. Nowicki said, “My primary concern would be precision and accuracy. If we're asking an AI model for answers, are we getting the same answer every time we ask that model? And is that answer correct?”

He added, “We want not only repeatability when we're preparing for a very compliance-heavy process and the future of 10-K and 10-Q reporting. But we also need those answers to have a high degree of accuracy.”

The panelists factored time into the AI equation, noting that companies preparing a public offering have no shortage of tasks to complete and should make sure they are prioritizing the right things. According to Pikoos, once your company is close to going public, say, several months out, you should be careful about introducing AI, focusing instead on getting your financials in order and attending to other important due diligence activities. 

“If you have 18 months, 24 months, absolutely explore automation, explore ways to drive efficiency into your business,” Pikoos said, noting that AI has a wealth of interesting use cases.

That’s sound advice. Every business, even pre-IPO companies, should be at a minimum learning about AI; investigating how and where it might fit into company strategy. But the period immediately prior to an IPO is crunch time, when the company needs to be focused on the thousand tasks large and small that must be executed properly for a successful IPO.

DFIN works closely with many of these companies, so we see it first hand. Attention to detail matters. That’s why we provide solutions like ActiveDisclosure and Venue Virtual Data Room.

Businesses rely on ActiveDisclosure to build the financial reporting rigor necessary for increased quarterly disclosure requirements. Connecting to Excel source data, it automates the creation of privately held financial statements for shareholders and external stakeholders.

Venue Virtual Data Room allows for securely storing and sharing documents across teams, advisors, and other third parties. It demonstrates credibility, security consciousness, and deal readiness.

And when you’re preparing to go public, deal readiness is paramount.