Earlier this month at TechCrunch Disrupt San Francisco, we sat down with Box’s Aaron Levie and PagerDuty’s Jennifer Tejada to debate their respective firms’ paths to an IPO, the final IPO panorama and the professionals and cons of going public. With a whole lot of latest IPOs faltering and elevated stress on startup valuations, now’s pretty much as good a time as ever to consider the position IPOs play in an organization’s lifespan.
“I think it’s really important to think of the IPOs, the beginning, not the end,” stated Tejada. “We all live in Silicon Valley and that can be a little bit of an echo chamber and you talk about exits all the time. The IPO is an entrance, right? It is part of the beginning of a long journey for a durable company that you want to build a legacy around. And so, it is a moment — it’s the start of you really sharing a narrative backed by financial data to help people understand your current business, the potential for your business, the market that you’re in, etc. And I think we tend to talk about it like it’s the be-all end-all.”
That’s one thing Levie undoubtedly agrees with. “I think we have too much of a fixation on the IPO moment versus just building durable business models and how do they end up translating into valuations. The valuation that you get at an IPO is due to variety factors.”
SAN FRANCISCO, CALIFORNIA – OCTOBER 02: (L-R) PagerDuty CEO & Chairperson Jennifer Tejada, Box Co-Founder/Chairman & CEO Aaron Levie, and TechCrunch Writer Frederic Lardinois converse onstage throughout TechCrunch Disrupt San Francisco 2019 at Moscone Convention Center on October 02, 2019 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)
It’s no secret that Box and PagerDuty had very completely different experiences as they obtained able to go public. Box introduced its S-1 just a few days earlier than a significant market crash again in 2014. PagerDuty, then again, went public earlier this yr, with strong financials and little or no drama.
Tejada, in some ways, attributed that to the work she and her staff did to get the corporate prepared for this second. “I get asked a lot by CEOs that are thinking about getting ready to go public, ‘you know, what was your playbook? How do you do this?’ And I think instead of thinking about what’s the playbook, you need to be intellectually honest about what your business looks like,” she stated. In her view, CEOs must give attention to the main indicators for his or her enterprise — those they need the market to know. But she additionally famous that the market wants to know an organization’s potential in the long term.
“You want to make sure that the market understands where you think the business can go and gets excited about it, but that they don’t over-rotate in their expectations, because dealing with really high expectations creates a lot of downstream difficulty.”
