There’s no question that 2023 was a stark contrast to the tech IPO craze the U.S. experienced in 2020 and 2021, but there’s renewed optimism that an IPO resurgence could be coming in 2024.
As the public market shows signs of recovery and tech companies start to lay the groundwork for their public market debut, communications teams need to develop, and start executing against, their pre-IPO strategy to set their companies up for success.
But if you’ve never navigated an IPO, you might question where (and when) to start. To cut through that complexity, V2 Communications recently hosted a webinar, moderated by SVP Kristen Leathers, with communications experts who have this experience. Our panelists included:
- Toni Iafrate, longtime V2 client and Chief Communications Officer at UiPath (NYSE: PATH), an AI-powered automation company that achieved the third largest software IPO when it went public in 2021
- Chantelle Darby, VP of Communications at VC firm Accel, who has counseled brands like UiPath, Klaviyo, CrowdStrike, and Squarespace on their pre-IPO communications strategies.
- Donna Stein, Adjunct Professor at Syracuse University’s S.I. Newhouse School of Public Communications, who brings more than 45 years of experience counseling pre-IPO and public companies across a wide range of industries.
Here are their communications tips for tech companies planning their public market debut:
Lay the Groundwork Early
The IPO process can take anywhere from 12 to 18 months, but getting your business aligned and headed down that path is a journey that starts much, much earlier. Our panelists suggest planning 2+ years in advance of listing day. Communications professionals surround themselves with experts who have has experience navigating IPO—and, if they don’t have experience, lean on the network of those who may have done it before, like investors and board members. In addition, our panelists advise:
- Acting like a public company way before filing the S-1 – Regardless of how far away listing day actually is, a key part of building alignment and preparedness is acting like you’re already public. This means transparently disclosing financials and announcing news regularly (e.g., 1-2x/month).
- Building your corporate and executive brand – On listing day, the company’s ultimate goal is to get people to buy their stock at a high price. To ensure people have a positive perception of the company, it’s critical that companies earn a steady stream of media coverage—driven by corporate news, product innovation, and executive and corporate profiles. Brands should also pursue high-growth corporate awards like CNBC Disruptor 50 and the Deloitte Fast 500.This is crucial to build a brand’s public image and supporting its growth story.
- Ensure executives are equipped, and invested in, serving as your primary spokespeople to tell the brand story – Your CEO and CFO should be your only spokespeople as IPO day approaches (and on listing day). They have the credibility and authority, strategic vision and financial expertise, and—assuming they are media trained, which they should be!—can articulate the company’s story, growth potential, and financial performance effectively.
- Lean on investors to help guide you and share your growth story – Your investors want your IPO to be as successful as you do, and they have experience counseling companies’ communications strategy ahead of a public market debut. Leverage their media networks and spheres of influence, and ask lead investors to serve as spokespeople—their endorsement fosters a sense of commitment and validation for your brand.
Put an IPO Plan in Motion
As plans for an impending IPO begin to take shape, communications teams need to focus on communicating their growth story and plans to both internal and external stakeholders.
- Internal communications is critical and time intensive – Internal communications to employees cannot be overlooked in lead up to IPO. Enlist your employees as brand champions by arming them with the communications and tools to share the company’s growth story on social media (in a way that won’t conflict with SEC regulations). Open and transparent employee communication can help and maintain focus and productivity among employees during a potentially disruptive period pre-IPO.
- A quiet period doesn’t mean a silent period – The quiet period preceding an IPO is a regulatory restriction imposed by the SEC on the company and associated individuals involved in the IPO process. Your company, its executives, employees involved in the IPO process, underwriters, and other involved parties are prohibited from making public statements or engaging in promotional activities that could influence the company’s stock value. But that doesn’t mean you have to go entirely silent. Communications professionals can set a cadence beforehand so that communications (media interviews, announcements, etc.) doesn’t appear to increase. For instance, by putting out regular announcements early, that sets the precedent and isn’t raised as out-of-the-ordinary. Brands can continue with thought leadership and lean on third parties to tell their story (e.g., customers and investors).
- Book media interviews for day-of listing day – Consider the top media targets that you’d want to brief on the day of IPO, and pitch them. Consider these goals while also being realistic about what’s possible in a given—and very hectic—day.
- Understand how the stock is likely to perform and develop messaging accordingly – The night before IPO, you’ll find out what the stock will list at. Work with IR to understand how the stock will likely perform in the first 24-48 hours and perceived in the market. Have messaging ready for spokespeople’s media interviews based on whether it performs better/worse than expected—and always bridge back to key messages touting vision and growth.
Expect the Unexpected on the Day of IPO
The day of an IPO is full of excitement and—let’s be candid—chaos. Be mentally prepared to juggle a lot of moving pieces as you staff media interviews—from making sure spokespeople are where they need to be to making sure their lighting, hair and makeup are TV-ready!
But, most of all: enjoy the day. It’s a day that people in our professions may only experience once!
Prepare for a Post-IPO Norm
A successful IPO brings with it a whole new set of communications challenges and considerations that can impact the future of the company. While things have changed since private company days, communications teams will want to continue to tell that growth story to ensure shareholders maintain trust in the company’s vision and ability to execute – ultimately driving its performance.
- Understand storytelling through the lens of SEC regulations – After the IPO happens, communications need to be viewed through a few different lenses. With new regulatory and financial implications, any messaging and narrative-building needs to be kept in the context of compliance and reporting needs.
- Be consistent with media around earnings – The first earnings call is the most important. Be consistent with how you engage media, starting with the first call (e.g., do media interviews regardless of performance).
- Work closely with IR – Businesses need to account for the activities and expectations of a public company. With new experiences like earnings calls to account for, communications teams need to work with IR and business executives to practice running calls and prepare for a new kind of attention.
This all is only the tip of the iceberg. V2 has experience building brands on the path to IPO and managing communications for publicly traded companies. Watch the full webinar here and get in touch if you’re interested in partnering with V2.