Public Exit Readiness in Canada: What Most Founders Overlook
Why This Matters
Many entrepreneurs dream of going public—whether as a growth strategy, liquidity event, or validation of their business. But the reality is that a successful public exit begins long before the listing. Preparation isn’t just about timing the market—it’s about being structurally, operationally, and financially ready for life on the other side.
Founders often assume that the public listing itself is the hurdle. In truth, that hurdle is preceded by a maze of legal, financial, and strategic checkpoints that shape the outcome of the transaction.
Going Public Is Not the Finish Line
Whether the path is through a traditional IPO, a reverse takeover (RTO), a Capital Pool Company (CPC) transaction, or a direct listing, founders need to recognize that going public is a transformation—not a transaction.
Once public, a company enters a highly regulated environment. That includes:
- Ongoing continuous disclosure under NI 51-102
- Board and governance requirements under exchange policies
- Insider trading and reporting obligations under NI 55-104
- Financial audit timelines, MD&A filings, and regulatory scrutiny
All of these expectations require early groundwork. That’s why readiness is not an afterthought—it’s a gating condition.
The Real Work Happens Pre-Transaction
Some of the most significant risks in a go-public strategy arise not from the market, but from internal gaps that emerge during diligence or exchange review. These often include:
- Disorganized cap tables with legacy terms, side letters, or undisclosed preferences
- Incomplete financial records or accounting policies not compliant with IFRS
- Vague IP ownership or licensing structures that create red flags
- Inadequate board composition or unclear governance planning
- Over-reliance on founder relationships without sustainable operational systems
Each of these can create delays—or worse, derail the transaction entirely.
What Preparation Actually Looks Like
Preparation for a public exit means building the infrastructure of a reporting issuer before you become one. That includes:
- Ensuring all financials are audit-ready and up to date under IFRS
- Cleaning up corporate structure, resolving related-party issues, and finalizing IP assignments
- Documenting employment and compensation arrangements, including equity plans
- Preparing your board composition, committee mandates, and governance policies
- Developing investor materials (deck, FAQ, IR site) that align with disclosure expectations
It also means thinking about life after listing: Can your team maintain reporting obligations? Is your investor relations function in place? Are you ready for public scrutiny?
Founders Often Underestimate This Phase
The biggest miscalculation? Thinking the transaction is the hard part. In reality, the most time-consuming phase is the pre-transaction prep. It affects how long your audit takes, how fast you can complete your filing statement, and whether your listing will be delayed by exchange comments.
Companies that cut corners or treat preparation as checklist work tend to stall mid-process. The ones that succeed are the ones who view readiness as strategy, not paperwork.
Closing Thought
There’s no perfect timing to go public. But there is a perfect trap: assuming you’re ready when you’re not. Preparation is the bridge between ambition and execution—and it’s what separates sustainable public companies from those that stumble out of the gate.
For more insight into preparing for a public exit in Canada, contact us.