The Importance of Both Numbers and Words in IPO Success
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January 13, 2026
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The IPO market has been subdued since the COVID-fuelled plethora which peaked in 2021.1 There are however signs that the appetite for initial public offerings (“IPOs”) amongst both companies and investors is beginning to warm up. The second half of 2025 has seen The Beauty Tech Group,2 Princes Group3 and Shawbrook Group4 achieve listings on the LSE, whilst Ottobock,5 Verisure6 and Framery7 have done so in Germany, Sweden and Finland respectively. These IPOs may encourage others to pursue IPOs in 2026 which could lead to a far busier year for new listings than the previous four.
Against this backdrop of growing interest in IPOs, what is it that drives IPO success on a fundamental level, from a company’s perspective? A tremendous amount of work goes into preparing companies for an IPO, so what are some of the factors leading to this success?
Both Numbers and Words Matter for IPO Success
When companies prepare for an IPO, attention often skews heavily toward the numbers — growth projections, EBITDA multiples and financial disclosures. But history shows that the words — how a company articulates its purpose, strategy and future narrative — can be just as decisive in determining whether the IPO merely lists or truly lands. Without a strong narrative on how the numbers are derived, it is difficult for potential investors to have confidence in financial forecasts or to trust management in being able to deliver on future performance.
Successful listings are more than just simply financial events. They can serve as moments of transformation, particularly should a company raise significant primary proceeds to kickstart growth or fuel great acquisitions. To secure an effective IPO, an organisation must simultaneously demonstrate its economic strength and earn the market’s confidence in its vision and leadership. Both sides matter and when either falter, the value leaks away.
The Numbers: Capturing the Full Value Potential
The numerical side of IPO readiness is not just about compliance and forecasting. It is about showing that the business has achieved and can sustain a trajectory of disciplined transformation. A key goal of the pre-marketing — so-called ‘early looks’ or ‘pilot fishing’ — allows investors to assess how well the business has met its historic targets for delivery. Yet, in our experience, most transformations underdeliver on their potential showcased in these early looks over time.
We have seen three recurring shortfalls that erode transformation value before companies ever reach the market: the ‘three compounding gaps’.
The Ambition Gap: Not Identifying the Full Potential
Many companies underestimate their full improvement potential over time. Perhaps conditioned by the sell-side analysts’ forecast period, which is typically three years, companies focus on visible or more certain levers to drive value, such as cost efficiency, while neglecting harder or less tangible ones — for instance pricing, capital efficiency, digital enablement or growth acceleration. In our 2025 Private Equity Value Creation Index, 80% of firms reported frequent or occasional use of cost structure optimisation, whilst only 24% of firms report frequent use of pricing optimisation.8 Unfortunately, the penalties for missing these short-term forecasts are stiff, which encourages caution in the mindset of the executives and IPO advisers, with the consequence that the long-term potential of the business can be underplayed. This can limit ambition and compresses valuation headroom.
The Alignment Gap: Leadership Not Committing to the Full Ambition
Even when full potential is known, leadership teams often struggle to commit collectively. This is particularly the case when incentives are varied and not consistent amongst the executive management. Partial alignment, cautious targets or inconsistent ownership reduce dedication and follow through. Public investors can sense this ─ a management team that hesitates to stretch internally will struggle to inspire external confidence. Sometimes this can be a matter of personal style and priorities amongst the leadership, however in the words of Charlie Munger: “show me the incentive and I’ll show you the outcome.”
The Execution Gap: Erosion During Delivery
Transformation plans frequently lose momentum in implementation. Initiatives stall, metrics drift and behavioural changes fail to embed. Without clear accountability, consistent tracking and the right governance, value leakage co penetrates over time. This is where company structure and organisation really matters. “Building implementation capability (people, process, systems) within an organisation is critical and takes dedicated focus. Erosion comes from both achieving a lower end state or a delay in getting there. For example, each day of delay on £10m of run rate impact equates to lost in-year impact of £40,000.” Says Jason Rogers, Managing Director at FTI Consulting and previous Director of Transformation at British Airways.
Underwriters to IPOs spend much time understanding the financial controls and reporting framework of the company, mainly from a board reporting and control perspective. Focus on operational execution is also required to ensure momentum is not lost within a business, typically under the auspices of the Chief Transformation Officer. To misquote the management guru Peter Drucker: “execution eats strategy for breakfast.”
The Compounding Effect – Numbers Don’t Lie
Supposing a company achieves only a 70% success rate on each of the ‘three compounding gaps’. The effect multiplies quickly on some basic maths:
0.7 × 0.7 × 0.7 = 0.34 — meaning only about one-third of the potential maximum value survives.
This is why many organisations may approach an IPO operating at only a fraction of their full economic potential. Unbeknownst to them and their investors, their valuation ceiling is already capped before the prospectus is printed.
The Words: Shaping Market Perception and Confidence
If the numbers define what the business is, the words define what the business believes it can become. Investors don’t just buy financials; they buy a story of purpose, credibility and growth. Strategic communication turns the company’s transformation into a narrative of momentum, resilience and clarity of direction.
Narrative Consistency and Credibility
The IPO journey demands coherence between strategy, financial performance and messaging. Disconnected language such as claiming growth leadership while showing anaemic organic revenue, undermines trust instantly. Clear, consistent communication across the prospectus, media engagements and investor briefings reinforces the story investors are being asked to believe.
Vision and Purpose Beyond the Numbers
The market rewards companies that demonstrate why they exist, not just what they earn. An authentic purpose tied to societal value or industry transformation, helps investors believe that performance is sustainable, not situational. In the same vein companies need to convey their right to win in their respective market and their position versus competitors. This is commonly seen as a ‘moat’ which protects their margins as they create value for shareholders. This “why” is especially critical for institutional investors who must defend long-term positions to their own stakeholders.
Leadership Presence and Communication Discipline
An IPO tests leadership credibility under pressure. The ability of the CEO and executive team to convey conviction, humility and alignment is a signal of organisational health. Investors often reveal that they invest in management as much as in metrics, meaning words, tone and behaviour can inspire confidence and trust in future performance just as much as the financial numbers themselves.
Managing Perception After the Bell Rings
The IPO is not the finish line for management teams, rather it’s the starting gate to a whole new regime under public markets. Clear post-listing communication — transparent reporting, consistent updates and narrative continuity — helps sustain valuation and trust beyond the initial hype cycle. In reality, the market comes down very hard on earnings misses, to which the share price reaction and hit to management reputations can be severe. It is therefore vital for management teams to be very clear on their short-term expectations for the business. Inevitably this means management allowing for some contingency when it comes to setting earnings expectations. The best companies manage to consistently beat expectations by under promising and over delivering. If companies can get on the ‘beat-and-raise’ cycle when it comes to financial forecasts, share price performance ensues. The longer a company can stay on this trajectory, the higher the trust in management and the higher the valuation goes for the company.
When Numbers and Words Work Together
When the quantitative and qualitative dimensions align, an IPO achieves more than a listing for the owners — it earns a valuation premium. An IPO by its very nature needs to attract new investors to the company. Successful IPOs therefore are adept at capturing these investors who are willing to pay a premium for exposure to the company. To obtain this premium, these investors need to see both operational discipline (numbers) and strategic coherence (words).
- The numbers prove the business is solid.
- The words make investors believe in its trajectory.
Neglect either one and the company risks the same compounding effect that undermines transformations which would put the chance of achieving an IPO in jeopardy.
Final Thought
IPO success is a test of integration. It demands the precision of the CFO and the storytelling of the CEO — the numbers that stand up under scrutiny, and the words that stand out in the market.
Both numbers and words matter. Together, they convert potential into valuation and valuation into belief.
Footnotes:
1: Dr. Ishak Demir, “Global IPO Trends” World Federation Of Exchanges (January 2025).
2: London Stock Exchange, “London Stock Exchange welcomes The Beauty Tech Group to the Main Market” (October 2025).
3: London Stock Exchange, “London Stock Exchange welcomes Princes Group to the Main Market” (October 2025).
4: London Stock Exchange, “London Stock Exchange Welcomes Shawbrook Group plc to the Main Market” (October 2025).
5: EQS News, “Ottobock celebrates successful IPO in Frankfurt” (October 2025).
6: Mondo Visione, “Nasdaq Stockholm Welcomes Verisure plc To The Main Market” (October 2025).
7: Nasdaq, “Nasdaq Helsinki welcomes Framery to Main Market” (December 2025).
8: “2025 Private Equity Value Creation Index: Recalibrating Value Creation,” FTI Consulting (June 2025).
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January 13, 2026
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