proper selection of KPIS and forecasting methodoloy is crucial
An IPO isn’t the finish line; it’s the start of a new playbook where credibility and execution become critical drivers of long-term value. Among the many pillars of IPO readiness is a sound and disciplined forecasting methodology. Companies that thrive after going public are the ones that start practicing disciplined forecasting early and consistently hit the targets they set, long before the S-1 is even filed.
Accurate forecasting is the foundation of managing expectations both internally and on the Street. It gives leadership visibility into the business, aligns internal teams around realistic goals and provides Wall Street with a roadmap for future growth.
But forecasting doesn’t operate in a silo: it needs to be fully integrated into the broader IPO readiness plan. That means building strong cross-functional team coordination between the senior executive team, board, finance, investor relations, legal and communications. It needs to be an integrated approach because delivering results in line with expectations post-IPO impacts every audience. The sooner your team gets this, the better positioned you’ll be for a successful IPO and to support your valuation over the long term.
Laying the groundwork for success
Effective IPO preparation begins 12 to 24 months before a company plans to list and developing a very strong forecasting methodology during this time is foundational. This ‘pre-public’ phase is where companies begin to refine key performance indicators (KPIs), testing assumptions and modeling how the business performs under various scenarios. Building strong FP&A and investor relations capabilities well before the IPO is paramount, as this strong foundation enables the integrated IPO team to pressure test the company’s ability to meet guidance and KPIs well in advance of being presented to Wall Street.
Starting early allows teams to build the rigor needed to be prepared to be a public company, in addition to giving leadership the time to become comfortable with forecasting processes, while instilling discipline in operational planning. These early exercises are often the first true indicators of whether the company is ready for the transparency and scrutiny of public markets.
Companies with strong forecasting habits understand how to set realistic targets and communicate clearly. Once public, consistently hitting and – even better – beating your guidance parameters and KPIs is what builds long-term credibility with the market and a stronger valuation.
KPIs that stand the test of time
In the early quarters post-IPO when Wall Street is still forming its long-term view of the company, the stakes are especially high and every disclosed data point becomes a proxy for management’s credibility. Missed targets, especially in the first two earnings cycles, can do irreputable damage. Once you lose investor trust, it’s incredibly hard to win it back, and these early stumbles can weigh on the stock well beyond the quarter, even if the fundamentals improve later.
One of the earliest and most strategic forecasting decisions a company must make is selecting the KPIs it will share publicly. These metrics are also the connection between what’s happening inside the business and how that gets communicated externally, forming the basis for how investors track the company’s progress in driving long-term profitable growth and how your investment story is measured over time.
KPI selection needs to be intentional and built for long-term continuity. You don’t want to highlight a metric that’s likely to change dramatically – or worse, disappear – after a few quarters. Sudden shifts in reporting or definitions can raise red flags on Wall Street around transparency and performance consistency. If you introduce a KPI and later pull it from your public disclosures, you risk damaging the company’s credibility.
Benchmarking against your peer group is a must. Investors will compare your KPIs to industry norms, so if your numbers look different or are defined in a unique way, be prepared to explain why.
Forecasting is a strong foundation post-IPO
Forecasting discipline doesn’t stop once you go public. Companies need to establish a regular cadence for reforecasting, reviewing assumptions with the board and aligning with investor relations. This post-IPO structure helps ensure messaging is consistent and that there are no surprises when it’s time to report earnings.
Going public is often the result of years of growth and planning – but once you ring the bell, the focus shifts. The market expects predictability. Teams that take the time to build forecasting readiness early are the ones that tend to perform better and build long-term investor trust.
In the end, companies that take forecasting seriously signal to the market that they’re not just ready to go public – they’re ready to stay public.
Nicole Noutsios is the founder of Stratos Advisors and a board member of NIRI’s San Francisco chapter
