Pre-IPO Advisory vs IPO Advisory: What’s the Difference?
Embarking on an Initial Public Offering (IPO) is one of the most significant milestones for any company. It opens the door to raising capital, enhancing credibility, and expanding business reach. However, the IPO journey is complex and requires expert guidance.
This is where pre-IPO advisory and IPO advisory come in. While the two are related, they serve different purposes at different stages of the IPO process.
Understanding the difference can help your company prepare effectively, avoid costly mistakes, and ensure a smooth listing journey.
In this article, we’ll explain how pre-IPO advisory differs from IPO advisory, when each is needed, and how services such as IPO readiness assessment and accounting services in Malaysia support businesses along the way.
This is where pre-IPO advisory and IPO advisory come in. While the two are related, they serve different purposes at different stages of the IPO process.
Understanding the difference can help your company prepare effectively, avoid costly mistakes, and ensure a smooth listing journey.
In this article, we’ll explain how pre-IPO advisory differs from IPO advisory, when each is needed, and how services such as IPO readiness assessment and accounting services in Malaysia support businesses along the way.
What is Pre-IPO Advisory?
Pre-IPO advisory is the preparation stage before a company formally applies for listing. It ensures the business has the right foundations to meet regulatory requirements and attract investors.
Key areas covered include:
- IPO readiness assessment: Evaluating governance, financials, internal controls, and compliance gaps. See IPO Readiness Checklist.
- Corporate structuring: Reviewing shareholding, subsidiaries, and legal structures for efficiency.
- Financial clean-up: Aligning accounting practices with market standards. Accounting services in Malaysia are critical here.
- Risk identification: Highlighting areas that may raise red flags during due diligence.
- Strategic planning: Determining which market (ACE vs Main Market) is best, and defining fundraising goals.
Pre-IPO advisory sets the stage so that by the time you start the IPO process, your company is investor-ready.
What is IPO Advisory?
IPO advisory kicks in once a company is ready to begin the official listing process. This involves working directly with regulators, underwriters, and investors to execute the IPO.
Key areas covered include:
- Regulatory compliance: Preparing the prospectus and liaising with Bursa Malaysia and the Securities Commission.
- Underwriter coordination: Working with investment banks to structure the offering.
- Valuation and pricing strategy: Determining offer price and number of shares.
- Marketing the IPO: Roadshows and investor relations to generate demand.
- Execution support: Managing timelines, due diligence, and listing day logistics.
IPO advisory is about execution, ensuring the listing is successful both financially and reputationally.
Pre-IPO Advisory vs IPO Advisory: Key Differences
| Aspect | Pre-IPO Advisory | IPO Advisory |
|---|---|---|
| Timing | Conducted before the IPO process begins (12–24 months prior). | Starts once the IPO filing process begins. |
| Focus | Readiness assessment, compliance checks, structuring, strategy. | Execution of the IPO: compliance filing, underwriter engagement, listing. |
| Key Services | Governance review, internal controls, accounting clean-up, tax planning. | Prospectus preparation, valuation, pricing, investor engagement. |
| Outcome | Ensures company is IPO-ready and attractive to investors. | Ensures successful execution of the IPO on listing day. |
| Advisors Involved | Accountants, auditors, tax advisors, corporate consultants. | Underwriters, lawyers, regulators, investor relations teams. |
Why Both Are Important
Many companies mistakenly believe that IPO advisory alone is enough. In reality, skipping pre-IPO advisory can lead to:
- Delays due to incomplete documentation.
- Regulatory rejections.
- Poor valuations due to weak financial reporting.
- Higher costs of remediation.
Engaging a pre-IPO advisory team early allows companies to resolve weaknesses long before the listing process begins. IPO advisory then builds on this foundation to deliver a smooth, successful listing.
See also: What to Prepare Before IPO: Beginner Guide.
See also: What to Prepare Before IPO: Beginner Guide.
The Role of IPO Readiness Assessment
An IPO readiness assessment is a structured evaluation of your company’s preparedness for going public. It reviews:
- Financial statements: Are they audit-ready and compliant?
- Governance: Is your board structured according to Bursa Malaysia’s requirements?
- Internal controls: Are systems in place to support reporting and compliance?
- Strategic alignment: Does the IPO align with long-term business objectives?
Learn more: IPO Readiness Assessment Services.
The Importance of Accounting Services in Malaysia
Accurate financial reporting is central to both pre-IPO and IPO advisory. Accounting services ensure that:
- Financial records meet the standards required by investors and regulators.
- Historical accounts are reliable and audited.
- Projections are based on sound assumptions.
- Tax planning aligns with IRAS and Bursa Malaysia requirements.
For example, see Pros and Cons of a Company Going Public.
Common Mistakes Companies Make
- Starting too late: Leaving preparation until the IPO advisory stage.
- Poor governance structures: Not aligning board composition with Bursa requirements.
- Weak internal controls: Lack of reliable processes for financial reporting.
- Overestimating valuation: Without thorough pre-IPO analysis.
- Ignoring compliance risks: Overlooking tax, legal, or regulatory issues.
See more: Initial Public Offering Mistakes to Avoid.
FAQs
Q1: How early should I start pre-IPO advisory?
A: Ideally 12–24 months before listing. This allows enough time to resolve governance, compliance, and accounting issues.
Q2: Can I go straight to IPO advisory without pre-IPO advisory?
A: Technically yes, but highly discouraged. Skipping pre-IPO advisory increases the risk of delays, compliance failures, and weaker valuations.
Q3: Who provides pre-IPO advisory services?
A: Typically audit firms, tax advisors, and consultants who understand regulatory requirements and IPO readiness. See IPO Readiness Checklist.
Q4: How do accounting services in Malaysia support IPOs?
A: They ensure financial data is accurate, compliant, and audit-ready, giving investors and regulators confidence in the company.
Q5: What’s the difference in outcome between pre-IPO and IPO advisory?
A: Pre-IPO advisory ensures your company is investor-ready. IPO advisory ensures the IPO process is executed successfully on listing day.
A: Ideally 12–24 months before listing. This allows enough time to resolve governance, compliance, and accounting issues.
Q2: Can I go straight to IPO advisory without pre-IPO advisory?
A: Technically yes, but highly discouraged. Skipping pre-IPO advisory increases the risk of delays, compliance failures, and weaker valuations.
Q3: Who provides pre-IPO advisory services?
A: Typically audit firms, tax advisors, and consultants who understand regulatory requirements and IPO readiness. See IPO Readiness Checklist.
Q4: How do accounting services in Malaysia support IPOs?
A: They ensure financial data is accurate, compliant, and audit-ready, giving investors and regulators confidence in the company.
Q5: What’s the difference in outcome between pre-IPO and IPO advisory?
A: Pre-IPO advisory ensures your company is investor-ready. IPO advisory ensures the IPO process is executed successfully on listing day.
Conclusion
For Malaysian companies eyeing an IPO, understanding the difference between pre-IPO advisory and IPO advisory is essential. Pre-IPO advisory lays the groundwork through readiness assessments, compliance reviews, and accounting improvements. IPO advisory then takes over to execute the listing smoothly.
By engaging the right advisors early — including experienced teams in IPO readiness assessment and accounting services in Malaysia — companies can maximise valuation, avoid costly delays, and ensure a successful public listing.
For more resources:
By engaging the right advisors early — including experienced teams in IPO readiness assessment and accounting services in Malaysia — companies can maximise valuation, avoid costly delays, and ensure a successful public listing.
For more resources:
