Companies like @SnowflakeDB @asana @Airbnb are making headlines as some of the most anticipated IPOs of 2020. It feels like yesterday we were preparing to take @okta public.
What it’s actually like to go through an IPO & be a public company ⬇️
What it’s actually like to go through an IPO & be a public company ⬇️
Concerns pre-IPO:
- Being public would make it harder to invest in the long term.
- We’d be constrained, no longer agile & aggressive.
- Employees would watch the stock price & lose focus.
- Less intensity after “reaching the goal” (which is why you have to move the goalpost).
- Being public would make it harder to invest in the long term.
- We’d be constrained, no longer agile & aggressive.
- Employees would watch the stock price & lose focus.
- Less intensity after “reaching the goal” (which is why you have to move the goalpost).
Benefits of being public:
- Helped us tell our story (biz press interested in @okta in a way they never were before).
- Gave us stability & “validity” (which customers appreciated).
- Gave us access to capital markets (raised $2B in 2 quick fundraises).
- Helped us tell our story (biz press interested in @okta in a way they never were before).
- Gave us stability & “validity” (which customers appreciated).
- Gave us access to capital markets (raised $2B in 2 quick fundraises).
Other takeaways from going public:
- It’s not the fastest path to liquidity. After the IPO, there's a 6-month lockup, then your stock sales are public/scrutinized by investors. M&A = quicker, but wasn't for us.
- Limits what we could share internally. Transparency gets harder.
- It’s not the fastest path to liquidity. After the IPO, there's a 6-month lockup, then your stock sales are public/scrutinized by investors. M&A = quicker, but wasn't for us.
- Limits what we could share internally. Transparency gets harder.
Can't forget the roadshow. In venture rounds, you might meet with 2 or 3 $1B funds. Pre-IPO, it was 8 meetings a day with $5-20B funds. Keep the coffee flowing, but stay hydrated. I kept my early AM workout routine for some normalcy.
Got the crash course in IR: it's all about being consistent with your message & setting reasonable expectations, then exceeding them. This is the foundation of a stable predictable business.
(Our key to success: recurring subscription review & happy customers.)
(Our key to success: recurring subscription review & happy customers.)
How I benefited from @okta going public:
- My control of the company increased significantly.
- Preferred shares rights & preferences go away as everyone converts to common.
- My shares along with VC converted to super-voting shares. As VCs sold their shares, my voting % went up.
- My control of the company increased significantly.
- Preferred shares rights & preferences go away as everyone converts to common.
- My shares along with VC converted to super-voting shares. As VCs sold their shares, my voting % went up.
How my job has changed:
- More time in board meetings (committees, recruiting, communicating with, etc).
- More time on IR & with investors (earnings reports, conferences, 1on1s - might sound repetitive, but you often learn interesting & unexpected things).
- More time in board meetings (committees, recruiting, communicating with, etc).
- More time on IR & with investors (earnings reports, conferences, 1on1s - might sound repetitive, but you often learn interesting & unexpected things).
For years, we'd compensated employees with stock options & we HAD to give them liquidity. It was fun to celebrate with the team on the big day.
There was one thing I wasn’t worried about that DID happen: some great employees made so much money that they retired. Good for them!
There was one thing I wasn’t worried about that DID happen: some great employees made so much money that they retired. Good for them!
One of @fkerrest’s mantras was “it’s not about going public, it’s about being public.” So good luck with your first earnings call, @ Frank Slootman @moskov @bchesky!
• • •
Missing some Tweet in this thread? You can try to
force a refresh
