What must you do after estimating implied EV in an IPO process?

After estimating the implied enterprise value (EV) during the IPO process, the next logical step is to determine the equity value. This is crucial because the enterprise value represents the total value of the firm, incorporating both debt and equity, while equity value is specifically what shareholders will realize after accounting for any outstanding debts and obligations.

In this context, the process involves taking the implied EV and subtracting any IPO proceeds, which typically refers to the cash that the company will receive from the sale of its shares during the IPO. By doing this, you arrive at the equity value, which is essential for understanding how much value is effectively attributable to the shareholders post-offering.

This step is pivotal in the IPO process as it helps in communicating the value proposition to potential investors and setting the appropriate share price based on the assessed value of the company.