IPO & Exit Security Preparation
Security issues discovered during transaction diligence destroy value - reduced multiples, holdbacks, delayed closings, or failed deals. We help companies build security programs that withstand scrutiny and protect transaction value.
IPO Readiness
Security Programs for Public Company Requirements
Public companies face elevated security expectations from regulators, auditors, investors, and customers. We help companies prepare:
Regulatory Requirements:
- SEC cybersecurity disclosure rules compliance
- SOX IT general controls for financial systems
- Board cybersecurity oversight documentation
- Incident disclosure procedures and timelines
Governance & Documentation:
- Board-level cybersecurity expertise and oversight
- CISO role and reporting structure formalization
- Security risk management program documentation
- Cybersecurity metrics and board reporting
Operational Readiness:
- Incident response capabilities for disclosure requirements
- Security monitoring and detection maturity
- Third-party risk management formalization
- Business continuity and disaster recovery
Audit Readiness:
- SOX ITGC control documentation and testing
- SOC 2 Type II certification achievement or maintenance
- External audit support and evidence preparation
- Control gap remediation and documentation
IPO-ready security programs demonstrate governance maturity that regulators, auditors, and investors expect.
Exit Preparation
Security for Strategic Acquisitions & PE Exits
Whether preparing for strategic acquisition or PE exit, security affects transaction value:
Buyer Perspective:
- Security issues create remediation costs buyers will deduct
- Compliance gaps limit combined entity market access
- Incident history creates liability concerns
- Weak security posture indicates organizational risk
Value Protection:
- Proactive security assessment identifies issues before buyers do
- Remediation before market strengthens negotiating position
- Strong security program differentiates from competitors
- Documentation demonstrates mature governance
Transaction Support:
- Prepare for buyer security diligence questions
- Provide security documentation packages
- Support technical security assessments
- Address buyer concerns during negotiation
Exit-ready security protects transaction value and reduces deal risk.
How We Help
Our Exit Preparation Approach
We help companies prepare for IPO or exit with security programs that withstand scrutiny:
Assessment Phase:
- Evaluate current security posture against transaction requirements
- Identify gaps that will concern buyers or regulators
- Estimate remediation timelines and costs
- Prioritize issues by transaction impact
Remediation Phase:
- Address high-priority security issues
- Achieve required compliance certifications
- Build governance and documentation
- Implement controls required for target state
Transaction Support:
- Prepare security documentation for data rooms
- Support buyer or auditor diligence processes
- Respond to technical security questions
- Address concerns and negotiation support
Timeline depends on current posture and transaction timeline. We recommend beginning exit preparation 12-24 months before anticipated transaction.
Common Questions
How does security affect IPO valuations?
Security increasingly affects IPO valuations as investors recognize cybersecurity as material business risk. Strong security programs demonstrate governance maturity, reduce risk of post-IPO incidents that damage stock price, and satisfy institutional investor expectations. Conversely, security weaknesses discovered during IPO preparation can delay offerings or reduce valuations.
What security certifications do we need before going public?
Requirements depend on your industry and customer base. Most companies need SOC 2 Type II certification. Regulated industries may need additional certifications (HIPAA, PCI DSS, FedRAMP). SEC rules require documented cybersecurity risk management and governance, not specific certifications. We help you identify which certifications matter for your situation.
How do SEC cybersecurity rules affect IPO preparation?
SEC rules require disclosure of cybersecurity risk management, strategy, and governance in annual reports, plus timely disclosure of material cybersecurity incidents. IPO candidates need documented cybersecurity programs, board oversight, and incident response capabilities. The rules don't mandate specific controls but require transparency about your approach to cybersecurity risk.
What's the timeline for IPO security preparation?
Timeline depends on current posture. Companies with mature security programs may need 6-12 months to formalize governance and documentation. Companies building programs from scratch typically need 18-24 months. Key milestones include SOC 2 certification (6-12 months), SOX ITGC readiness (varies), and governance formalization. Start early - security gaps discovered during IPO preparation create delays and increased costs.
Planning an Exit or IPO?
Let's discuss your timeline and what it takes to get security ready.