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May 2017
Five Tactical Considerations Well Before an IPO
Lessons Learned from 81 IPOs
Brian Truesdale, Managing Director...
1
Brian Truesdale
Global Head of Software Investment Banking
20+ years Technology IB
Select transactions:
IPOs
Follow-Ons
...
2
Tech (and Healthcare) dominate IPO market since 2016
2
Healthcare
Offer / 30 day1
Diversified
Technology
Energy
Real Est...
3
Tech (and Healthcare) dominate IPO market since 2016
3
Healthcare
Offer / 30 day1
Diversified
Technology
Energy
Real Est...
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
...
5
What do investors focus on?
Scale
Path to
profitability
M&A
potential
Go-to-
market
strategy
Competitive
advantage
Manag...
6
5 Tactical considerations well before an IPO
Engage buyside early and often
Prepare to go public for a given year, not m...
7
Evolution from metrics to unit economics
The new...The old...
Metrics that explain, differentiate and position your busi...
8
This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite,
subscribe for or place any s...
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Five Tactical Considerations Well Before an IPO

Brian Truesdale, Managing Director at J.P. Morgan on tactical considerations for startup CEOs to consider well before an IPO.

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Five Tactical Considerations Well Before an IPO

  1. 1. 0 May 2017 Five Tactical Considerations Well Before an IPO Lessons Learned from 81 IPOs Brian Truesdale, Managing Director Global Head of Software Investment Banking
  2. 2. 1 Brian Truesdale Global Head of Software Investment Banking 20+ years Technology IB Select transactions: IPOs Follow-Ons Convertible debt Debt M&A
  3. 3. 2 Tech (and Healthcare) dominate IPO market since 2016 2 Healthcare Offer / 30 day1 Diversified Technology Energy Real Estate Consumer Financials Sector % above / within12017 vs 2016 # IPOs 2 2 8 1 6 6 8 7 7 27 18 3 4 4 5 8 6 9 100% 100% 40% 75% 67% 50% 2016YTD 2016 2017YTD 75% 1 Represents metrics for 2017YTD IPOs 27% 21% 0% 14% 15% 17% 6%
  4. 4. 3 Tech (and Healthcare) dominate IPO market since 2016 3 Healthcare Offer / 30 day1 Diversified Technology Energy Real Estate Consumer Financials Sector % above / within12017 vs 2016 # IPOs 2 2 8 1 6 6 8 7 7 27 18 3 4 4 5 8 6 9 100% 100% 40% 75% 67% 50% 2016YTD 2016 2017YTD 75% 27% 21% 0% 14% 15% 17% 6% 1 Represents metrics for 2017YTD IPOs
  5. 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
  6. 6. 5 What do investors focus on? Scale Path to profitability M&A potential Go-to- market strategy Competitive advantage Management team Growth Market leadership
  7. 7. 6 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
  8. 8. 7 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
  9. 9. 8 This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. Companies and individuals named are for illustrative purposes only. This information should be treated confidentially. Any distribution, copy, reprints, or forwarding of these materials to others without the explicit permission of JPMorgan Chase is strictly prohibited. © 2017 JPMorgan Chase & Co. All rights reserved. Disclaimer

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