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Five Tactical Considerations Well Before an IPO
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May 2017
Five Tactical Considerations Well Before an IPO
Lessons Learned from 81 IPOs
Brian Truesdale, Managing Director
Global Head of Software Investment Banking
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Brian Truesdale
Global Head of Software Investment Banking
20+ years Technology IB
Select transactions:
IPOs
Follow-Ons
Convertible debt
Debt
M&A
5. 4
Software has led Tech IPO issuance
($mm) 2011 - 2015 2016 2017 YTD
# 70 6 5
Revenue
CY $107 $120 $227
FY $137 $156 $318
% growth 28% 28% 36%
uFCF margin
CY (9%) (2%) (7%)
FY 2% (2%) (5%)
Offer / 30 day 28% 49% 34%
Note: Represents median metrics in given time period
2017 YTD($mm) 20162011 - 2015
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What do investors focus on?
Scale
Path to
profitability
M&A
potential
Go-to-
market
strategy
Competitive
advantage
Management
team
Growth
Market
leadership
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5 Tactical considerations well before an IPO
Engage buyside early and often
Prepare to go public for a given year, not month
Unit economics....the new secret sauce
Dual track? Proactive, opportunistic, and responsive
Management + Board Public company caliber3
2
1
4
5
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Evolution from metrics to unit economics
The new...The old...
Metrics that explain, differentiate and position your business
Plan ahead and be proactive
ASPs
Operating profit
Maintenance attach rates
RevenueDSOs
Maintenance renewal rates
Net income
Maintenance churn
ACV
Gross margin less CAC
MRR
LTV/CAC
Payback period
CAC
Cohort analysis
Net expansion rates
Cohort contribution margin