Brad Delaplane and Doug Pepper | July 7, 2021
CMOs Talk IPOs: Brand Awareness and Investor Perception on the Public Stage
The journey to an IPO is as unique as the company embarking upon it. But no matter the path, every organization must ensure that investors are receptive to the company’s story. Through category creation, positioning, and brand awareness, the marketing function plays a vital role in how a company’s public readiness is perceived by the market. These crucial topics were explored in the recent ICONIQ Ideas: Growth event “CMOs Talk IPOs: Brand awareness and investor perception on the public stage,” moderated by ICONIQ Growth general partner Doug Pepper.
Doug was joined by an all-star panel that included Alex Rosemblat (CMO of Datadog), Carilu Dietrich (CMO advisor to 1Password, Segment, and Miro), Denise Perrson (CMO of Snowflake), and Ryan Carlson (former CMO of Okta who is currently leading Okta’s incubation team).
This panel was especially unique given that Alex, Denise, and Ryan had scaled with their companies from early stages through IPO, a rare outcome according to recent research from ICONIQ Growth’s Leadership Advisory team. (Carilu is actively advising multiple companies that are on their path to IPO and played a vital role in Atlassian’s IPO.) We analyzed data from about 150 marketing heads across 49 software companies that went public in the last five years. Notably, 56% of marketing leaders left either during the same growth stage they were hired into or the stage immediately following. Only 17% of companies we analyzed still had the same head of marketing when they went public as they did at their early stage, which we defined as sub-$20M annual recurring revenue (ARR).
No matter the stage that a marketing head joins the company, our panelists all emphasized that their top priority must be building the company’s category vision, long before an IPO is on the horizon. Articulating the vision as early as possible will pay dividends across numerous efforts like go-to-market, recruiting, and fundraising as the company scales. Carilu specifically stated that companies should set a clear strategy to communicate their path to a multibillion dollar market cap and to align that strategy with real business OKRs. If the company establishes itself in a distinct category many years in advance of the IPO, then the process of writing the S-1 will be much more fluid. It’s surprising how many companies often scramble to refine their category and differentiation during the S-1 writing process!
Our panelists agreed that the marketing head should spearhead the business section of the S-1 to ensure that the company is appropriately positioned. Otherwise, bankers may steer the content, increasing the risk of it being misaligned with the narrative that company has built over many years. Denise advised to begin writing the business section as far as six months in advance of the filing. Use other S-1s as a template, she suggested. While the bankers do play an important and vital role during the S-1 process, Ryan highlighted the importance of concisely sharing the value proposition and company intent so the bankers don’t make enormous edits that misalign the marketing strategy. Alex noted that marketing heads are particularly skilled at messaging to their buyers so it’s helpful to adjust language to resonate with financial institutions – a population for which bankers can provide good feedback.
When it comes to the roadshow video, the panelists encourage leaders to be overly prepared and not to reinvent the wheel. Utilize the bankers to access other roadshow videos to learn best practices. Companies and financial institutions value authenticity. Precision and language matter! If executives need public speaking coaching, hire one! Creating this content is expensive and time-consuming, and Denise smartly mentioned the importance of repurposing these video materials for future use. To that end, it’s imperative to invest in a skilled videographer, use a teleprompter, and own the script of the video.
The day of the IPO is a special celebration of all the employees’ hard work over the years, but it’s also a huge marketing event! Alex shared that Datadog invited many of the company’s local NYC employees to celebrate together on the trading floors and at Times Square. Datadog captured this phenomenal experience with the help of a professional photographer to ensure they had the shots they might want for future content. Snowflake’s IPO was unique given the COVID-19 pandemic. The company sent an “icebox” (box of swag) to every employee, which many of them “unboxed” on social media, resulting in viral posts. Although the panelists agree on the importance of the IPO milestone, Carilu mentioned the IPO is just the beginning of the next chapter for the company. Ryan agreed that the best way to have an outstanding IPO is to continue running the business well.
Ultimately though, the IPO is a financing event with a myriad of marketing benefits, from elevating your brand to opening doors to iconic partners and global resources. Seize the moment, and the market!
More wisdom from this ICONIQ Ideas: Growth session:
- Operate like a public company for multiple quarters prior to the IPO. Run pipeline and practice consistent messaging on mock earning calls. Take ownership of the narrative for many quarters to come. Once public, consistency and predictability are more important than overpromising.
- Be proactive in collecting customer references across all industries, customer sizes, and geographies. Seek permission to use a customer’s logo for testimonials and use cases long before filing the S-1.
- Companies have more negotiating leverage for the stock exchange selection than they are led to believe. Think long term about how each exchange will help with brand awareness and marketing events.
- Work closely with a legal team to understand new expectations and approval processes required of a public company.