What It Actually Costs to Go Public

A primer for founders and boards on the full economics of an IPO: before the filing, through the registration process, and across the first year as a public company.

Every founder remembers the first time they saw an underwriting fee expressed in dollars rather than percentages. Six percent sounds abstract. Six million dollars does not.

At Belay Global, we sit on both sides of this conversation, as sponsors taking companies public and as advisors helping boards decide whether they should. The pattern we see most often is not sticker shock at the banner numbers. It is surprise at everything around them: the audit uplift nobody budgeted, the D&O premium that arrived at three times the placeholder, the SEC reporting manager who needed to be hired six months before anyone thought the role existed.

This primer is written for the people who have to sign off on the budget: founders, CEOs, and board members. It organizes the question the way we believe boards should evaluate it. Not as a single transaction cost, but as three distinct phases of investment, each with its own economics, its own timeline, and its own failure modes.

For illustration, we anchor to a representative profile: a company raising approximately $100 million at roughly a $1 billion enterprise value, listing on a major U.S. exchange. Scale the ranges to your situation, but the structure of the analysis holds across the small and mid cap spectrum.

Phase One: Readiness, Before Anyone Files Anything

The least glamorous money you will spend on your IPO is also the highest leverage money. Readiness work typically begins twelve to eighteen months before a filing, and for a company of this profile it generally runs $0.8 to $1.7 million.

The single largest item is usually the audit uplift. Private company financials, however clean, are rarely PCAOB ready, and re-auditing two to three years of historicals to public company standards cannot be compressed. Auditors work on their timeline, not yours. Alongside it sits the quarterization of historical results, technical accounting memos on revenue recognition and equity instruments, and governance work to prepare the company to operate on a public reporting timeline. As an emerging growth company, formal SOX controls design can be deferred until after listing.

• IPO readiness assessment -- $150K to $300K
• PCAOB audit uplift (2 to 3 years) -- $200K to $500K
• Quarterization & technical accounting -- $100K to $200K
• SOX readiness / controls design -- Not needed for EGC
• Governance & restructuring legal -- $100K to $200K
• Systems & ERP investment -- $150K to $350K
• Tax structuring & comp consulting -- $75K to $100K
• Phase One Range -- approximately $0.8M to $1.7M

Illustrative ranges for a ~$100M raise at ~$1B enterprise value. Actual costs vary with complexity and readiness.

A note from experience: nearly every post-IPO executive survey finds the same result. Accounting and legal costs came in higher than expected. The companies that avoid that outcome ran a formal readiness assessment early, identified the gaps honestly, and sequenced the spend rather than discovering it. Readiness money spent at month eighteen is an investment. The same work compressed into the registration window is a premium priced emergency.

Phase Two: The Transaction Itself

This is the phase everyone budgets for, and it is dominated by a single line: the underwriting fee. Across more than a thousand U.S. IPOs, underwriting discounts have averaged four to seven percent of gross proceeds, with smaller deals pricing toward the top of that range. On a $100 million raise, expect roughly $4.5 to $7 million to the syndicate.

Around that anchor sits the professional fee stack: counsel for diligence, registration statement drafting, and SEC comment cycles; auditor comfort letters and consents; accounting advisory support for the MD&A and pro formas the SEC reads most closely. The smaller lines matter less individually but should still be on the page, including registration fees, exchange listing, the financial printer and XBRL work, roadshow costs, and blue sky filings.

• Underwriting fee (4.5 to 7% of proceeds) -- $4.5M to $7.0M
• Company counsel -- $1.0M to $1.8M
• Underwriter counsel reimbursement -- $350K to $600K
• Auditor: comfort, consents, procedures -- $250K to $500K
• Accounting advisory: registration statement support -- $200K to $400K
• Printer, SEC/FINRA, exchange listing -- $250K to $500K
• D&O insurance, IPO-year tower -- $400K to $1.2M
• Roadshow, blue sky, transfer agent, misc. -- $150K to $300K
• Phase Two Range -- approximately $7.5M to $12.5M

The underwriting fee represents more than half of total transaction costs.

One line deserves its own paragraph: directors' and officers' insurance. The IPO-year D&O tower is routinely the most underestimated cost in the entire transaction, and it arrives late in the process, when negotiating leverage is lowest. Get quotes early.

One budgeting nuance: not everything you spend during this phase appears in your prospectus. Disclosed offering costs exclude items like year-end audits, quarterly reviews, and legal work on restructuring and governance. That is precisely why so many management teams feel the final invoices exceeded the number they showed their board.

Phase Three: The Costs That Never Stop

For a newly public company at this scale, the first year recurring budget typically runs $1.5 to $3 million in external costs, before headcount. The annual audit and three quarterly reviews anchor the schedule. A Sarbanes-Oxley compliance program adds meaningful advisory cost, though emerging growth companies can defer the auditor attestation in year one. Ongoing securities counsel covers the Exchange Act reporting cycle: the 10-K, the 10-Qs, the 8-Ks, the annual proxy.

• Annual audit + quarterly reviews -- $350K to $650K
• SOX 404(a) program / internal audit -- $150K to $300K
• Securities counsel, Exchange Act reporting -- $150K to $300K
• Investor relations program -- $180K to $230K
• Annual proxy: solicitor, distribution, legal -- $125K to $150K
• Filing agent, exchange annual fee, gov. tools -- $150K to $250K
• D&O renewal -- $300K to $700K
• Board compensation -- $300K to $600K
• Phase Three Range -- approximately $1.5M to $3.0M

Excludes incremental headcount, typically an additional $600K to $1.5M annually.

And then the line that surveys consistently identify as the most underestimated of all: people. Operating on a public company timeline requires depth that most private companies deliberately deferred. SEC reporting expertise, controllership capacity, FP&A rigor, and an investor relations function. Treat that headcount as a precondition of listing rather than a post-IPO aspiration. A company that misses its first or second quarterly close as a public company has spent its credibility on something far more expensive than salaries.

The Whole Picture

Stacked together, our representative company should expect total costs across the three phases of roughly $10 to $17 million, or ten to seventeen percent of a $100 million raise once the first public year is included. That is not an argument against going public. It is an argument for going public with clear eyes.

Three principles we would leave with any board running this evaluation:

Budget in phases, not in a single number. A board that approves "the IPO budget" as one figure will revisit it three times. A board that approves a readiness budget, a transaction budget, and a public company operating budget understands what it actually authorized.

Interrogate the advisor stack. The reflex toward marquee names is understandable but expensive. Mid-tier audit, accounting advisory, and filing agent firms with genuine technical depth can execute this work at meaningful savings, often seven figures across the full process, without compromising quality. The right question is not who is the biggest. It is who has done this exact transaction profile, recently, well.

Respect the recurring costs. The transaction ends. The reporting calendar does not. Companies that treat public company infrastructure as a cost to minimize tend to learn, expensively, that the market prices execution credibility into the stock.

Going public remains one of the most powerful capital formation and currency creation events available to a growing company. The companies that capture that value are the ones that walked in knowing the price.

*This briefing is part of the Belay Global Partners Public-Market Readiness Series. A downloadable PDF version of this primer is available [here](/belay-ipo-cost-primer.pdf).*