Tip of the Week: Speeding a Self-Filing

More and more companies contemplating going public are, appropriately, choosing the “self-filing” approach over a reverse merger with a shell. There are many situations that make sense as I laid out in my book. One of the main drawbacks with a self-filing is it can often take longer than a shell merger, and is subject to the uncertainties of SEC review and comment. So are there ways to make that process go faster?

The answer: yes. Clearly some parts of the self-filing process are not in control of the parties but rather the SEC. But here are some simple tips to speed the self-filing process:

• Draft your initial filing carefully: sometimes parties just want to get something filed and hurry too much in the preparation of it. Often you will pay in the form of many additional, unnecessary comments from the SEC. Taking a little extra time up front often can save you even more time in the review process.
• Respond quickly to comments: Management is busy, so are the lawyers and accountants. Nevertheless, one part of the process in your control is how fast you get back to the SEC when they have comments. If you care about getting the self-filing done quickly, drop everything and get the response done as soon as possible.
• Don’t argue on comments you will probably give in on later: Often a company or accountant will say, well, we think they will very likely not give us any room on our response, but let’s try and see what happens. If you care about the speed of the process, it is usually not worth challenging comments if your advisers believe there is virtually no chance of success.
• Focus heavily on financial comments: Usually, many comments from the SEC relate to accounting or financial aspects of the business. Make sure when you start that your accountants and auditors are ready to focus on responding to comments quickly. Here again there are times when accountants insist on challenging comments when it questions the judgments they have made, even though they know that ultimately they will not succeed.
• Always be respectful: The SEC is an important and powerful government agency. Almost everyone I have worked with there are highly intelligent and well-meaning folks. But their focus sometimes jibes with that of companies they are seeking to regulate for the protection of investors. Make sure you are always respectful and responsive to the SEC. Not only do they deserve it, but belligerence is just as likely to lead to more ire from them than positive results.

Good luck as you move forward with self-filings!

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