Oracle NetSuite has recently unveiled that NetSuite customers make up 66% of tech IPOs since 2011 in the US including Alkami Technology, AppLovin, Coinbase, ON24, SkyWater Technology Foundry, thredUP, TuSimple, & Urban Compass#CustomerLove. In 2021 alone, a total of 42 NetSuite customers have gone through a SPAC (Special Purpose Acquisition Company) or IPO (Initial Public Offering) in a webinar presented by Tom Kelly, director of product management and marketing for Oracle NetSuite.
At ONE Pacific, we partnered with startups in Hong Kong to go global by strategizing their finance and operation capabilities from the post-seeding stage to evolve into the high growth stage. Read their stories: https://www.onepac.net/client-success/
NetSuite’s robust financial infrastructure provides a powerful valuation and audit process that can help to ensure that a company can meet regulatory compliance requirements from the start, which can make private companies in need of a sponsor, otherwise known as target companies, more attractive to investors.
NetSuite can help the business address four areas of change when a company goes public:
Legal: Public companies are effectively playing a new game when they enter the public market and confront the new laws and regulations surrounding the public equities market. For example, the Sarbanes-Oxley Act (SOX) is a U.S. federal law that aims to protect investors by making corporate disclosures more reliable and accurate. NetSuite acts as a safeguard by embedding controls to keep companies compliant as well as providing detailed audit trails of every transaction that businesses can easily and accurately report on, reducing the time and effort required to meet stringent SOX requirements.
Regulatory: Once a public company understands the rules of the game, it is important that they understand who is refereeing the game and how the rules are enforced. Public companies are required to comply with many different regulatory entities. For example, NetSuite provides functionality that makes the complicated requirements of revenue recognition as easy as depreciating a fixed asset to comply with ASC 606 and IFRS 15 revenue recognition regulations. Today, most companies operate across borders – this requires compliance with local regulations like China’s Golden Tax Rule. NetSuite meets accounting regulations across multiple countries including US, UK, Germany, Japan, Australia, Singapore, Hong Kong, China, Malaysia, Thailand and more, so that companies can be assured of meeting regulatory requirements with accuracy and efficiency.
Shareholders: Public companies need to understand how to work with their new teammates: shareholders. Shareholders expect transparency, timeliness, consistency and candor from public companies. NetSuite’s ability to quickly close the books and provide accurate, compliant and timely information will provide the basis for a company to deliver key information from SEC reporting requirements to board of director and shareholders meetings almost with the press of a button.
Leadership: Leaders of a public company need to fundamentally change the way they manage risk, make decisions and set objectives for the company. NetSuite customers can quickly develop robust reporting processes via dashbaords and custom reporting while leveraging built-in disclosure controls that ensure preparing for and complying with public company requirements is as efficient as possible with strong internal controls and accurate financial reporting.
If your start-up/ high growth business is experiencing bottleneck to scale up, talk to our consultants to learn from the best practices of other successful start ups.
Adopted from this source: https://www.netsuite.com/blog/why-erp-is-instrumental-in-public-offering-processes-including-spacs