2. Agenda
An In-The-Trenches perspective from a former investment
banker and 2x $1B+ IPO CFO.
The IPO process is all consuming and taking control earlier will
enhance the likelihood of success—and reduce risk.
An IPO is just a financing, why the big deal?
• Risk
• Reward
• Initial Public Offering
• Historically, has established legitimacy
J. Peter Bardwick
3. What’s Different?
The level of work required. Accounting, legal, S1 drafting,
choosing bankers, pre deal IR….
Zero tolerance for:
• Tardy reporting
• Inaccurate LT forecasts
• Missed sales targets/Other missed metrics
• Incomplete or sloppy records
• Ill prepared public communications and IR
• Unclear strategy and/or weak financial models
J. Peter Bardwick
4. So Why Do an IPO?
J. Peter Bardwick
Public Late Stage Private
Valuation Actual Theoretical
Liquidity Maximum Uncertain & Variable
M&A Enablement (Buy & Sell) Maximum Uncertain & Variable
Legitimacy & Branding Maximum Uncertain & Variable
Long Term Value Creation Maximum Uncertain & Variable
Operational Focus Maximum Uncertain & Variable
5. The Crystal Ball Says…
J. Peter Bardwick
The IPO market, especially for tech, is slow
Potential accelerants:
• Investors need liquidity, not just “mark to
market” profits
• Private money continues to tighten
• Being a Unicorn goes from fun to painful*
• Excess capital raised in the past several
years is spent
Source: Pitchbook
“Some Unicorns have made such generous promises to their preferred
shareholders that their common shares are nearly worthless.”
Prof Ilya Strebulaev, Stanford GSB
6. The Crystal Ball Also Says…
J. Peter Bardwick
Source: CB Insights
28% of companies exited
through M&A or an IPO
within 6 rounds of funding.
88% did at least 4 rounds of
financing
7. Widening the lens on IPO prep
If an IPO is just a financing, why not think about
it as such?
And if an IPO isn’t likely, a sale, refinancing, or PE
recap is. All of which are enhanced by thoughtful
IPO prep.
So which IPO prep activities create value,
reduce risk, and save costs?
J. Peter Bardwick
8. Risks of Not Taking Control
The risk of your life being miserable.
VS.
Fun to fly the plane while under construction in
many cases ….
not here.
J. Peter Bardwick
9. Key Focus Areas
1. The business works
2. Efficient financial operations
3. Compelling and consistent strategy and
financial model
4. Compelling and consistent IR
5. Team
J. Peter Bardwick
10. 1. The Business Works
Should you be a public company?
1. TAM
2. Competitive ecosystem
3. Volatility of results
4. Shareholder needs
5. Team competencies and dynamics
J. Peter Bardwick
11. 2. Efficient Financial Operations
1. Accounting Ops:
1. Quick and accurate close
2. Auditor review of Q’s and audit of K’s.
2. FP&A/Forecasting (and who owns it).
3. Data, information, BI, reporting.
Manage reporting and earnings calls like a
public company for a minimum of 2 quarters
prior to IPO.
J. Peter Bardwick
12. 3. Compelling and Consistent
Strategy + Financial Model
Public markets hate uncertainty and crave simplicity.
Does the financial model work without heroic
assumptions?
Stress test with outsiders and skeptics.
Be brutally disciplined about the elevator pitch.
J. Peter Bardwick
13. 4. External Outreach
Learn from CPG companies
Key to managing the IPO timeline
Practice when stakes are lower
J. Peter Bardwick
14. 5. Team
Potential key hires—people with public
company experience:
1. CFO or VP Finance
2. GC
3. CTO of VP IT
4. Advisors
5. Board
J. Peter Bardwick
15. All the other work?
Writing the S1, 409a valuations and choosing the
underwriting syndicate are all critically important.
However, these don’t have the same potential long
term benefits.
Build the best team, find the right partners, and
start early.
J. Peter Bardwick
16. Sources
1. Squaring Venture Capital Valuations with Reality. Stanford University
Graduate School of Business Research paper No. 17-29.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2955455
2. US PE & VC IPO Review, Pitchbook.
https://pitchbook.com/news/reports/2016-us-pe-vc-ipo-review
3. Venture Capital Funnel, CB Insights.
https://www.cbinsights.com/blog/venture-capital-funnel-2/
4. Initial Public Offerings: VC-backed IPO statistics Through 2015. Jay R.
Ritter, Cordell professor of Finance, University of Florida, January 6,
2016. https://site.warrington.ufl.edu/ritter/files/2016/02/Initial-Public-
Offerings-VC-backed-IPO-Statistics-Through-2015-2016-01-06.pdf
5. Crest image: http://www.brianvellmure.com/wp-
content/uploads/2012/04/toothpaste.jpg
J. Peter Bardwick