Inkhouse Managing Director Dan O’Mahony sat down with comms leaders to discuss how prioritizing public relations strategy can bolster a successful public market entrance. The conversation included insights and anecdotes from Inkhouse clients Lynn Boschee, VP of Corporate Comms at CAVA Group which went public in 2023, Jenna Kozel King, current VP of Corporate Marketing at Databricks who previously led comms strategy for Okta’s IPO in 2017 and Amplitude’s direct listing in 2021, and Monica Gould of Blue Shirt Group, IPO advisory, investor relations and strategic media firm that has managed approximately 300 IPOs in the last decade.
In addition to preparing CAVA, Okta, and Amplitude for the public markets, Inkhouse most recently supported the ServiceTitan IPO in December 2024 and also CarbonBlack (later acquired by VMWare) in 2018 and Remitly in 2021.
Dan O’Mahony: Dan O’Mahony here. I’m the managing director of Inkhouse West. Really, really excited for this panel today about comms around IPOs. I think we’ve seen a lot of change over the last five years with the economy going up nonstop until about mid-2022 and then a pretty serious IPO drought after that. And now we’re all kind of wondering what 2024 is going to look like. So we’re here to talk a little bit about what you can do to maximize your comms program when it comes to an IPO, and I’m really, really excited about the folks we’ve got here. So I’m going to jump into a handful of questions, but first I’m going to turn it over to folks to introduce themselves. And let’s start with Lynn.
Lynn Boschee: Hi everyone. I’m Lynn Boschee. I’m Vice President Corporate Communications at CAVA Group, and we IPO’ed in June of 23, so we were one of the few who IPO’ed last year.
Dan O’Mahony: And Jenna, you want to go next?
Jenna Kozel King: Sure. I’m Jenna Al King. I’m the vice president of corporate marketing at Databricks, a data and AI company. And in the past I’ve done the IPOs for Okta and Amplitude.
Dan O’Mahony: Alright, last but not least, Monica.
Monica Gould: Great. Monica Gould. I’m with the Blue Shirt Group. We’re an outsourced investor relations firm that’s focused on technology companies and we’ve managed about 300 IPOs over the last 10 years or so.
Dan O’Mahony: Wow. I’m really, really excited to have you three together. The first question I want to cover is, and I turn it to you first, Monica, but I want everybody to chime in if they have thoughts, is how dramatic of messaging have you seen shift in terms of how to talk in terms of the current economic climate? So before it might’ve been much more about growth and profitability was less of a priority, and now it’s obviously more. Has it been a huge shift or is it just really more that the balance has kind of swung a little bit more toward profitability? How would you say things have changed?
Monica Gould: Yeah, absolutely. So in the post-COVID era 20 to 22, we saw this increase in very, very early stage growth companies coming to market with no path to profitability whatsoever. That all came around the SPAC structure. And since many of those SPACs unfortunately didn’t survive, investor focus has definitely shifted much more to profitability. So whether it’s a newly public company, a private company, or an existing public company, the messaging very much shifted to what is the path to profitability, what’s the path to improving margins in any company that has not been able to show that has been not rewarded by the investment community? So that’s very much been the shift. I think early 2024, it looks like there is going to be a little bit more of a swing back towards the growth. So still a balance of growth and profitability, having the path to profitability there, but definitely the companies that are growing at a higher rate will get the ultimate reward.
Dan O’Mahony: That’s great. Lynn. I mean, you managed this in June 2023 when the economic recovery didn’t seem as likely as maybe it does now. So was that similar to how you feel about it based on what Monica said?
Lynn Boschee: Yeah, I mean absolutely. And CAVA is growing extremely quickly. We’re also able to talk about restaurant-level profitability, which is the engine of a company in this space. And so we had that core message of growth and a really clear path to profitability, and I think that’s one of the reasons that we were rewarded so well and continue to be by the street. And we flip profitable our first quarter as a public company. So that definitely helped support us, but I could not agree more that you need both of those messages to have a very successful IPO and making it, even if you’re not as close as we were, making it really clear how you end up there,
Dan O’Mahony: Jenna, I mean you managed two IPOs sort of before the profitability became so important. Obviously profitability has never not been important, but it was maybe just lower on the priority list. So obviously Databricks is not going public tomorrow, but as you think about that for future, how do you think it’s going to shift from an amplitude or Okta strategy? Is it a dramatic shift or is it just kind of an adjustment?
Jenna Kozel King: Yeah, I think you really have to understand what investor sentiment is at the time that you’re going public or want to go public. I think that’s incredibly important in how you think about communicating your metrics to the market. I think that it’s pretty clear that certainly during Okta and then amplitudes, IPOs, that kind of growth at all costs was okay, but I think we certainly saw as Okta, there was always a path to profitability at Okta and we communicated that kind of long-term or in regular communication with our investors around what that would look like. But I think that investor sentiment has changed and the companies that are being and will be rewarded will be those who show both profitability and incredibly fast growth. And I think as the market evolves, we will listen closely to what investors are thinking and make sure that we’re ready to tell the right story. That’s going to put us out in the kind of best front, best foot forward.
Dan O’Mahony: Yep, yep. Okay. Changing gears slightly, Jenna, a question for you. So hypothetically, if your CEO, a lot of the folks watching this are comms leaders at late-stage tech companies, CEO comes to them and says, I think we’re going to be going public in about a year, and if you believe them, what would you say would be the first few things to do to get your house in order?
Jenna Kozel King: Yeah, I think you have to understand your industry and have a clear position in your category, particularly for software and technology companies. It’s really the moment to make sure that your category and how you fit within the industry is well known to reporters and is well reported on within the media. It’s a great time to build your list and start thinking about who are the right media who will help us tell the story, who already understands us, who knows us. It’s the right time to start thinking about long term. What does the internal communications plan look like? Do we have everything we need? Do we have all the customer stories? Do you start talking to your customers and figure out who are the right ones, and who will help tell the narrative you want to communicate to the market? It’s a great chance to kind of get your last big stats out there, your big financial moments and your big stats before. Obviously once you kind of flip the S-1, you’re in a quiet period. So it’s just a great time to make sure that the narrative that you want to tell about the company is out there. And during that time, I do a lot of prep with the CEO. I do a lot of prep off the records with the media. I also put our CEO in front of the media doing off the records, just making sure they know that person and where the company is headed. And the big picture vision.
Dan O’Mahony: And I know one thing you’ve always stressed in our work together is the S-1 eventually comes and there’s no messaging around it. It is what it is. So the more nuance that those reporters have on why those numbers look the way they do, especially the numbers that might not be as good as the others can be really, really valuable for when they report on you. So no, that’s helpful. Monica, what do you think in terms of that? More from the IR side?
Monica Gould: Sure. So the earlier one can start the better. The cutoff point for investor relations activities is when a banking syndicate is chosen. So prior to the selection of the syndicate, the company is free to attend conferences, speak to sell-side analysts, and they should do as much of that as possible. So we would build a target list of relevant analysts that cover the peers that we want to be most closely associated with. Start introducing the management team to those analysts as part of that solicit invites to conferences, spend time on non-deal roadshows. The key thing there being that the Marques investors that we would want to participate in an offering would want to meet with a company four or five times maybe as a private company before the IPO roadshow. The IPO roadshow as a first meeting would already be too late for them to participate.
So these are companies like a Fidelity, a Wellington, a T. Rowe Price, etc.. So starting as early as possible and getting those engagements engaging with those sell-side analysts will help the company also select the co-managers that they would want to participate in the offering because while you’re picking your lead banks for the brand name recognition, the strength of their banking team, you’re picking your co-managers for the research and the aftermarket support in terms of conferences and marketing activities and the like. So that’s really the best opportunity to get a sense for who really engages with the story, who do we have buy-in and who do we think would be a good supporter of the company going forward?
Dan O’Mahony: That’s really helpful. Conversely, Lynn, if you don’t have a year, like you didn’t, but you’re coming in and you want to maximize a moment like this, I guess the question goes from what are the steps you take to how do you just triage and make sure you’re working on the most impactful and important stuff. If you have say a compressed two to three-month timeline, yours might’ve even been shorter than that. And Jenna, I want to hear your thoughts too, especially with Amplitude, because I think some folks will find themselves in that situation, I’m sure.
Lynn Boschee: Yeah, it was much shorter than that. I joined post S-1, so brand new to the company post S-1. So we were in that quiet period. There was not really a lot that we could do. I will say two things though. Our IR lead had done a wonderful job of everything that’s been discussed and just from an operating standpoint, the company had acted like a public company for a year before the offering, so that really prepared them to what’s an analyst call going to look like? What’s a quarterly earnings call going to look like? So they had a lot of that set up. I think the first thing I would do, I had it to do over again, and we did this at Lightning Speed, was a stakeholder mapping and audience mapping. So you have thought through who do you need to talk to in turning externally, what matters to them, what messaging do you want to make sure you’re underscoring with them and in a voice that resonates with them. And then executive prep is just absolutely vital. Sooner rather than later. We had the luxury of A CEO who’s just naturally really good at this many, many aren’t. So the more you can do to create what is that narrative, what’s the elevator speech? And then give them an opportunity to practice, practice, practice in mock interviews and mock analyst calls, it’s going to be far better, even if you have little time to do it. I would emphasize that.
Dan O’Mahony: That’s great. And Jenna, you agree or anything to add there?
Jenna Kozel King: My preference is to join a company at least two years before at IPOs, if you can work that at all. So highly recommend mine too. For Amplitude, I think I was three months before the IPO and I think a lot of things were not in place. I actually changed agencies. We brought on Inkhouse and hired a team. I think that the right person really quickly, I was running all of corporate marketing there. So hiring the right actually hired someone from Inkhouse. So sorry about that, Dan. But she is incredible. Hiring the right team and getting your ship righted quickly, it was critical. And then also I think practice, practice, practice, we went out quickly and that was a great strategy for Amplitude, but it meant that we just had a lot more work to do in those three months. So yeah, I would say practice at the CEO is critical as well.
Lynn Boschee: And just to jump on that, having the right partner, I don’t even know how quickly we hired and onboarded Inkhouse. I do know it was an insane schedule, but no matter how much time you have, having the right partner, you will not be able to do this yourself. Even with a really strong internal team, there is so much work going into it and IPO day is crazy, and you need a really strong partner who can work with you, who’s organized, who has all those media relationships, who’s going to connect with your CEO and leadership team. So cannot emphasize enough bringing somebody in who has experience doing this, who’s done it for another number of other companies and can really help and support.
Dan O’Mahony: That’s great. Thanks both. Monica, question for you. Changing gears a little bit here, most of the folks watching this I think are on the traditional comm side, so IR might be new to them in terms of investor relations with institutional investors. So what is the role of IR in the IPO process?
Monica Gould: Yeah, absolutely. So we work with the company in terms of their messaging and positioning to the investment community. That includes the sell side analysts from the bulge brackets to the boutique firms and the investors, so institutional investors, retail broker, et cetera. So we oversee and everything from the company messaging through the presentation, all the earnings documents. So we’ll work with the CEO, CFO and the rest of the team, the marketing team, legal, et cetera, and all the earnings documents, the earnings deck, the script, the press release, any other kind of financial communication, whether it’s customer-related trade issues or what have you. So we manage that entire process and really help the company just position themselves in the best way possible to the investment community.
Dan O’Mahony: That’s great. So when you’re, Jenna, I want to turn this to you. How do you think about messaging to a financial analyst or reporter compared to say a broader business or technology reporter? Are there some similarities and some differences? How do you think about it?
Jenna Kozel King: Well, the press are writing for financial analysts, so they’re going to be a lot more similar and look for messaging a lot closer to what the actual financial analysts are going to look for. Whereas I find that business tech kind of your other consumer press are much more interested in the big story of the company, the big vision that you’re trying to paint, a lot of the meat. And then I find that a lot of the broadcast journalists will kind of cover both. They’ll be both interested in the big trends that are happening around the world, but also kind of knowledgeable about your finances. And so you’ll want to make sure that your execs are prepped to have both of those conversations and know which one to have at which time.
Dan O’Mahony: Monica, how about yourself? How do you feel about messaging to those folks?
Monica Gould: Yeah, so sell side analysts are definitely going to get a lot more in the weeds with respect to financial metrics, guidance, key KPIs, especially how the company looks relative to a large cap, public peer, et cetera. So they’ll definitely get a lot more in the weeds on that. Also, strategy, competitive positioning. You can assume your first call with a sell side analyst will be at least an hour to go through a lot of those, especially if it’s somebody that’s interested in potentially covering the company in the future.
Dan O’Mahony: Got it. In my experience as someone on the agency side, it seems like the group to really work with the most is the legal team in a lot of ways because they can kind of make or break everything you want to do. It’s easy for them to say no, and obviously, they’re more risk-averse than comms leads might be. So what is the best way to work with them in a way that’s going to ensure that you are able to get as much done as you want? I want to ask all three of you, but I want to start with you, Jenna, just because I know you’ve had to do it with Amplitude and Okta. And I also want to talk a little bit about what might seem like a hard and fast rule could also just be the point of view of one member of the legal team. So how do you go about working with them to make sure you’re getting things signed off on?
Jenna Kozel King: Yeah, first off, certainly your legal team is one of your most important friends and stakeholders throughout an IPO process. I think I rarely do anything without running it by both our IR team and our legal team. Following the letter of the law is incredibly important to me and I think is for any company that’s going public, you have to follow the law. So that’s number one. Do that. I think where there is some gray area, and I think the question for me often is this a legal recommendation or is this a business recommendation? And I try and have those conversations open and often there’s a lot of press. There’ve been decades of years of IPO, so there’s a ton of precedence, but different companies have a different appetite for risk, and you have to understand that you have to understand your CEO’s appetite for risk, and you have to have clear, open communication with all those parties, so ir, CEO, and legal around what the tolerance for risk is and where the line in the sand is. And so I try and have those conversations early and often so we’re all on the same page and then go from there, but certainly always follow the letter of the law.
Dan O’Mahony: That’s great. Lynn, how about yourself?
Lynn Boschee: Yes, to all of that. I also think when it comes to the legal team, it’s incumbent on us to do a bit of push and a lot of partnership. So I had many, many conversations with internal and outside counsel, both of whom were very conservative to understand if we can’t do this, what can we do If we can’t say that, how can we make sure that this message gets out in a way that minimizes risk? And those conversations were really, really valuable, both in helping me understand where the limits were and also making sure our story got told in a very powerful way.
Dan O’Mahony: One thought before I hand it to Monica. Yeah, I also liked the approach of if we’re talking about it in the realm of risk, then just saying, all right, well if we don’t do this, then the risk is these stories come out either generic or inaccurate or just a lot shorter and less nuanced than we would get if we actually were able to do whatever it is we’re talking about doing off the record meetings or what have you. So it’s always important to say, well, this is what could happen if we don’t do this. There is a risk to not doing that too. So Monica, how about you in terms of partnering with the legal team? Is that something you spend a lot of time on?
Monica Gould: Yeah, absolutely. So our advice is to partner with them early and often. We’ve worked with a range of legal teams from those that like to be really in the weeds involved in every single meeting from the first story idea to all the way through the final document to those that just like to get sign-off at the end. So one, we want to understand what their style is so we know when to involve them and how to partner with them effectively. And then second is we always try to anticipate what legal edits would be like. So when we’re writing a script, when we’re writing a press release, we’re writing it with the legal team’s comments in the back of our heads. So we try to anticipate those and limit the number of edits and changes in the final phases of the documents.
Dan O’Mahony: That’s great. So once the S-1 is out and you’re into a more intense quiet period or you’re under more scrutiny, let’s say, how do you go about, obviously you need to partner with your legal team, every company is different, but Jenna, how do you think about you can and can’t do in that time and what’s off limits? What’s a gray area? What’s totally fine?
Jenna Kozel King: Yeah. Well first I would say it’s a little bit different if it’s a direct listing or a more traditional IPO. And so make sure you understand the rules and regulations for those. They’re a little bit different, but I think generally speaking, during that time, you should be doing normal course of business. The things that you’ve been doing all year long, your product announcements, your customer conferences, the S-1 doesn’t change the fact that you still need to do those to run and operate your business. And so you should still be doing media and conversations around that, but you should be doing it a lot more carefully than you used to because what is not legal is to kind of prime or pump the stock in advance of your listing. So what you need to be careful of doing is sharing numbers and metrics and doing storytelling that’s kind of greater or grander than what is in your S-1.
You’re not supposed to be publicizing the S-1 basically. So I think about it, is it a normal course of business product announcement that we have had planned for six months, then you should continue to do that and publicize that. Is it sharing new numbers or new customer numbers or things like that? No, that’s not acceptable during that time. I also do continue to do off-the-record conversations during that time. I’m very careful about it and all of that. Anything that you do during that time should be under an embargo, which would happen after. And so you have to have really trusted relationships with reporters during that time. But the purpose of those conversations should not be to promote or publicize the company. It should be to have the right conversations for after the listing day.
Dan O’Mahony: That’s really helpful. Lynn, how about yourself on that one in terms of that, that was really your whole world before CAVA went public,
Lynn Boschee: That was the whole world, and we were even more challenged because communications function didn’t exist until I joined, so join post-S-1. So what is normal course of business? We just didn’t have a lot. So a lot of conversations with our legal team about what we could and couldn’t proactively do, and then those embargoed conversations with the right reporters were invaluable to us. We had to push a bit to get legal to agree with them again because we didn’t have precedent for doing something like that vital to us because we hadn’t been out there a lot publicly. We weren’t a well-known company to many people. So there was a lot of work for people to do to get up and running, understand us, have the background of our business model, even our industry in some cases. So those conversations were really important and vital pre-IPO.
Dan O’Mahony: That’s great. Lynn, question for you. One of my favorite stories from the CAVA IPO was the Kramer Bowl. The CAVA Bowl was specifically made for Jim Kramer. Can you talk a little bit about how that was conceived and executed? Because obviously software technology companies probably can’t do something like that for Kramer, but at the same time it’s such a good example of getting sort of creative with what you can do.
Lynn Boschee: So what happened in our case, we were one of the first, if not the first, to go out in 2023 and also a consumer company that people could just understand. So we got a lot of people talking up the stock media, talking up the stock before we IPO-ed, including Jim Cramer, who I think for a week or more in advance was talking about Kapa. And one of the things that he said on air was, I like the stock. I don’t like the food because I can’t eat there because I’m allergic to garlic. One of our key messages is there’s something for everyone at CAVA. And this was, I don’t know, Dan, two days pre-IPO. So I had to call our chef, who by the way, is feeding everyone on the trading floor and everyone outside the exchange for an event and tell him, I need a Cramer bowl.
So there’s some cursing that went on. I’m standing at a coffee shop across from Inkhouse’s. He calls me back, I’m in line and he says, he doesn’t say hello. He doesn’t say anything else. He says with some cursing, is he allergic to onions? Is he allergic to garlic? They’re kind of the same thing. And he’s in full chef freakout mode. End of the story is we got the Cramer bowl done. We were able to give it to him on air. He was so excited. He posted it on his socials. So it was one of those fun things we’re able to do, but also sort of demonstrates, be ready for anything and be ready to take advantage of those opportunities as they come
Dan O’Mahony: To you. Yep, absolutely.
Lynn Boschee: By the way, his producer said when I emailed him, “This is one of the funniest email exchanges.”
Dan O’Mahony: My last question before I turn it over to the audience Q & A is I think a lot of times with IPOs, it’s so much excitement and lead up to that event that you can lose sight of. Well, where do you go from here? So for all three of you, I’d love to hear how do you think about maximizing an IPO in a way that also extends for truly the next three to five years of the company, right? Because we’re talking about the company’s next phase as a publicly traded company. So Jenna, maybe I’ll start with you there on how you think about building something that goes beyond just a big pop that day.
Jenna Kozel King: Yeah, the IPO is one day and what is hopefully a long and storied history of your company, and it is a lot of work to get there, but it is really just the first day of the rest of your life. So I think immediately following the IPO, there’s actually an incredible amount of work to be done. You’re starting to prepare for your first earnings, which is only a few months away. And so you’re starting to put together all the materials, the decks, the talking points, the rude q and ass. In many cases, this may be your executives’ first time doing public earnings calls. So I think practice is the number one thing that I can recommend getting your board members to help prepare your team and ask really hard questions, preparing those rude Q and A that investors are going to ask. I think there’s just a ton of work to be done in those first three months, and so I encourage people to take their day off the next day, but then you’re kind of back to work because a ton to be done to get ready for the rest of your life.
Dan O’Mahony: That’s great. And Monica, how about you?
Monica Gould: Yeah, so our advice would be to set conservative guidance because ultimately the company gets measured by how they perform relative to the guidance they set at the time of the IPO. So many companies, especially in tech, especially ones that may not ne profitable yet, we’ll set a long-term model. So it’s balancing showing good growth and setting more achievable expectations because the street is going to expect a newly public company to beat expectations and then raise guidance going forward. And not just the first quarter will be for the first few quarters and the first time a company misses, that’s going to hurt credibility. It’s going to hurt confidence in the company, and it’s going to take several quarters to gain that back of consistency. So really dialing back as much as you can showing good growth, but building in a good cushion into those early estimates is super key. So that the best case scenario, you beat and raise, you beat and raise, and then a year or two out after the IPO, you increase your long-term model because you’re so far ahead of plan.
Dan O’Mahony: That’s great. Lynn, any thoughts to add?
Lynn Boschee: Yeah, from a peer PR comms perspective, you’re going to get that halo, you’re going to have some attention. And so how do you leverage that going forward? And so for us, it was so new we used that. How do we take those relationships that we built as part of the IPO and maintain that interest, offer them our executives for other things, offer them thought leadership, and then one of the things we consciously and specifically did with Inkhouse is hire a firm that did both IPO communications and consumer pr. So how do you take that visibility and start to leverage it into the consumer front has been super valuable for us. Now people know our name. How do we make the most of that going forward?
Dan O’Mahony: That’s great. Well, thank you all. I’m going to go through a few audience questions that I have. And by the way, for folks watching the function to add a question is actually not working. So I have a few that have been passed to me, but if you have any, you can just email them to me and I’ll check just [email protected]. But for right now, let me just pull up the questions I do have. So Jenna, this was a question for you based on your answer. So can you talk a little bit more about how the process is different for a direct listing versus going through a NASDAQ and what that means for your role between Okta and Amplitude?
Jenna Kozel King: Yeah, I found the direct listing to be significantly harder than a traditional IPO. There are a lot more steps. There are things like an investor day video that you have to put out. We even did an early investor day call. Our first investor day call was actually before our first earnings. And there’s just a lot more work around communicating to investors that you have to do, given that you don’t necessarily have the full support of the banks to help you through that process. That’s kind of one of the things that will happen in a traditional IPO. The way that you do press releases is often a little bit different. There are different milestones that you are kind of announcing to the world. And the other thing I would say is it’s a newer tool and way to go public. So there are even as kind of evolving as people are using that method. So for example, we didn’t have a single person who had ever actually done a direct listing, and so we really had to rely on our agency support. Blue Shirt Group for example, helped us make sure we understood all the right milestones. And actually maybe Monica, you can speak to some of those. I’m sure you’ve done it before. I’ll pass it to you.
Dan O’Mahony: That’d be great.
Monica Gould: Yeah, so certainly the biggest challenge for direct listing is not having a syndicate of analysts that are automatically going to be covering the company. So is really that outreach effort is a lot more important and getting the buy-in and getting that organic interest. Ultimately the way the sell side works, they get paid to cover companies through being part of a transaction at some point, whether it’s an IPO or something in the future. So there’s that dangling the carrot there, but that’s really the biggest challenge for companies from a higher perspective is getting that sell-side coverage and interest, which will then it’s a hub and spoke system. So you get the sell-side analyst interested who will then drive investor traffic towards a company, and again, getting the company into conferences, scheduling deal roadshows, all to engage more with the investment community.
Dan O’Mahony: That’s great. Another question we got was how do you view the role of your PR agency and the IPO strategy and process? I’ll ask you Lynn first.
Lynn Boschee: Vital partner. I think really working in lockstep with your agency, leveraging their expertise and experience is incredibly important. And then also having that, for me, Inkhouse was my team. It was a team of one. So that’s constant communication, helping you develop messaging, helping you train your executives, bringing them up to speed to understand the story, I think is incredibly important. And then the other thing I would advise is have that team meet your CEO and your CFO early, because that chemistry is going to be really important. There’s a lot of trust that goes into you and your PR firm at this moment to make sure that chemistry is there. And Brad, our CEO immediately trusted Inkhouse, with the compressed timeframe we had, that made everything a lot easier. But your agency is 100% your team, whether or not you have an internal team, they become part of your team and that’s the way to be successful.
Dan O’Mahony: Excellent. Okay, next question. This is an interesting sort of tactical one. I’m glad someone asked it though. So if an executive was already scheduled to present at let’s say an industry conference, but it happens to fall after the S-1, but it’s about the company and about its growth, obviously there are probably some details that you would need to answer this, but would it be okay for them to still do that, or would it be a thing you’d kind of have to cancel on? And I want to turn it over to Jenna to see if you have a thought there, because I know that again, there’s probably some details that would matter, but I think there’s some nuance here
Jenna Kozel King: Probably. But I think my initial instinct wouldn’t be, no, I think my initial instinct would be to say, what are we saying? What are we going to say? What can we say that’s interesting and how can we stay within the guidelines and make sure we’re not promoting or gun jumping the stocks? Right. So I think if it was an industry conference where we were talking about our products and I felt really comfortable that our CEO would stay within the guidelines, the thing you have to be careful is everyone wants to say something interesting when you’re on stage at a conference. And that’s part of the reason to do it. You can’t say a lot of interesting things during that. And so you have to be really comfortable not saying anything interesting and focusing on the product and everything outside of maybe customer stories, for example. So I’d say it could be done, it can be done, but I think it would have to be done very carefully. There would have to be a lot of prep work and a lot of conversations with legal and IR to make sure you’re falling well within what is legal.
Dan O’Mahony: That’s great.
Jenna Kozel King: Again, this is not legal advice. You should listen to your lawyers, right?
Dan O’Mahony: Monica, I have a question for you from the audience. What do you do if the stock underperforms on listing day? What are the options in terms of messaging that outwardly? Is that something you just kind of have to own and sort of provide a response like we’re built for the long term, or what can you really do there?
Monica Gould: That’s a tough one. I mean, post IPO, you’re effectively in a 25-day post-effective quiet period. So there’s not a lot that can be done. There could be a range of reasons why the stock underperforms. It could be the broader market, it could be something that a peer comes out with. So it really depends on the specific situation. If there is something, there is a range of possibilities where you can address specific things. Say you’re doing business in China and there’s a new trade restriction or something to that effect, that could be something you can press release and address directly. If it’s because a peer pre-announced or is getting acquired or something happened with a peer, that’s probably something you can’t respond to, but it’s easily explainable. Having an outside IR firm is good from that perspective is that that firm can take those investor questions that come in during that time period and not have the company respond directly. So oftentimes it’s more the retail investor base that’s reacting to stock performance. Usually, the sell side and the institutional investors are well aware of what is driving the stock.
Jenna Kozel King: I think an important audience for that is internal. It’s really your employees who are going to be nervous and have lots of questions about that. And I think within the confines of an all-hands, for example, that can be something that the CEO can and often will address. But I think preparing the CEO for what the options are, again, working with legal and IR to kind of figure out what is happening in the right talk track is important. But certainly your employees are going to be one of your heart because they are shareholders and stakeholders in the company. They’re going to care a lot about that and they’ll probably be one of your hardest audiences.
Lynn Boschee: We had a full contingency plan, so what if something happens? What’s the messaging? And what Jenna said, really leaning into what you say to employees. So having those mechanisms in place already so there’s not a scramble was an important piece of work that we did.
Monica Gould: That’s great. And I would just add to that as part of the IPO process, having that conversation with employees about what is and what isn’t acceptable once you file the S-1 in terms of talking about the company to their friends, social media, et cetera. And so once you do have those town hall meetings and so on, you have to keep in mind that those employees may talk outside, outside of the firm about whatever’s discussed. So you have to be super careful about how you message that to employees as well.
Jenna Kozel King: Yeah, we’re very prescriptive around what employees could and couldn’t say about prior to and for the listing, we actually provided exactly a range of tweets and posts that were acceptable and you kind of had to choose from among them at both companies. And I think that worked pretty well. They were reviewed by our legal and outside counsel as well. And so I think having, just really being clear with employees exactly what they can and can’t say, makes there a lot fewer questions.
Lynn Boschee: Same thing, and we also partnered with our HR team and did a series of trainings in the lead up to the IPO once we filed the S-1 to educate them about what is material non-public information, how does this go? Why can’t you say anything? What are the risks of doing that? So they went into it really prepared and understanding not just what they could and couldn’t do, but the why behind it. And I think that was incredibly important, especially in a business. So we have 300 restaurants, restaurant leaders, and area leaders, who all really needed to understand.
Dan O’Mahony: Okay. Last question, I believe, unless I get any more is, and I hope that one of you has an answer to this. So do any of you have stories of something that went wrong during the IPO process? Maybe the CEO divulged info, they shouldn’t have a global event that disrupted things, some kind of mistake along the way. These can be generic, but Monica, you probably have the biggest view into this, anyone, but is there any examples of things that went sideways that we could all learn from?
Monica Gould: Yes. So there were things that I’ve seen personally through clients I worked with and then things we saw with other companies. The one big event we had, was working with the semiconductor company, they’ve since been acquired, but it was the night before the kickoff to the IPO roadshow. We were at, I think it was Goldman’s offices, and they did do business in China. I think they had a 30% customer in China at the time. And that was when the first China trade restrictions were announced. So we effectively had to put the IPO roadshow on hold. We had to go back to the drawing board, redo guidance, and take that customer out of the expectations, out of the model. And then we came back about three months later
Having taken them out, the company still felt, even with that customer completely taken out, which was the worst-case scenario, that they could still show good growth, good trend towards profitability, etc. The thing that we see most often though, and that’s hurt some companies more so than others, is getting the share count rate. So usually have an analyst day that’s separate from a modeling session.
The modeling session for the sell side community is much closer to the timing of the IPO. So that numbers are a little more final. Guidance is a little more final. And the very last piece of that is getting the share count in there and share account expectations. And it might seem like a small thing, but it throws off the big important number, which is EPS. And so making sure that going through the sell-side models, making sure that their expectations are correct with the kind of guidance that was laid out in the IPO.
Dan O’Mahony: That’s wild. Yeah. And really helpful. Okay. Jenna, Lynn, Monica, anything you feel like I should have asked or anything that you want to say about the topic before we wrap up?
Jenna Kozel King: It’s a lot of fun. You should definitely do it.
Dan O’Mahony: Highly recommend. I hope 2024 will be a little busier for everybody’s sake. Well, thank you all so much for taking the time. I really, really appreciate it, folks watching. We will have a recording posted online in the next few days for anybody that joined late or had to drop early. But again, just want to thank our panelists for taking the time. Your experience is invaluable and let’s hope 2024 is a little busier. Thanks everyone. Bye.
