Going public is a wonderful moment in time for a company, a marker of success and hard work that paves the way for a great future. At Pluralsight, becoming a public company was a vital step in achieving our mission to democratize technology skills and accelerate the path towards our goals.
We learned a lot during the IPO process, some of which I’m sharing in a four-part blog series over the next few weeks. In my first blog post, I shared how we decided the time was right to go public, getting clear on the “why” behind the filing, and having the right team and partners in place to execute.
After deciding the time is now, a big mountain to climb is building out your company story effectively for an investor audience through the roadshow presentation and video.
How it works: from “test the waters” to investor roadshow
The long, all-inclusive S-1 is filed and reviewed multiple times with the SEC. In preparation for the IPO roadshow, the S-1 needs to be reduced down to bite sized chunks for quick consumption by investor audiences. Before filing the S-1 publicly, companies are usually afforded the opportunity to pressure-test their message and performance in front of investors to see if it resonates. This is often a one-week experience, commonly referred to as “test the waters” meetings. It’s a series of one-on-one meetings with potential investors that helps refine the message, provide real-time feedback and identify where there may be gaps in your company’s story.
Assuming your “test the waters” visits were successful, you remain committed to moving forward with the public offering, and you’ve filed your S-1 publicly, you finish preparations and move to the full roadshow. The roadshow is an intense 8–9 days of sharing your company presentation to investors in more one-on-ones and in large and small group meetings. The roadshow video will have been released to the general investor audience on day 1 of your roadshow, so the focus in the initial 1–2 days is on the roadshow presentation. After the first couple of days, it’s likely most of your audience will have seen your video, so they want to jump straight into questions that will help them determine if they’ll decide to invest in your company.
I found it highly energizing to tell potential investors our story. I never tire of sharing our company’s mission, the incredible platform we’ve created to drive performance for the companies we serve, the world-class community of authors we’ve assembled, and the work of our amazing Pluralsight team members. After 14 years driving this business, I know our story well. But I still put a lot of effort into refining the story to highlight all the historical successes of the company, the challenges we’ve overcome, the value we create for our customers and our vision for the future.
Put in the work: Refining your company story
Do you know most people who stand up to give a presentation, even a really important one, often have never verbalized it? It’s a move that can leave you floundering when it matters most.
Here, I simply can’t overstate the value of presentation training. I say that knowing it’s something you may likely want to gloss over, because practicing a story 10 or up to 100 times is difficult or because it takes a lot of time or because you know your story so well. I founded my company 14 years ago and know our story like the back of my hand, but the training helped me refine and tell it in a way that resonated for investors. It’s well worth the time.
Being able to tell our story effectively was assisted by a presentation trainer, Jerry Weissman. Jerry helped us refine our skills for our roadshow presentation and taught us some new tips and tricks along the way. One tip was to start by determining the key message you want your audience to walk away with, which Jerry calls your Point B. The idea is that your taking your audience from where they were at the start of your presentation (Point A) to your objective (Point B). Once you’ve identified your Point B, you can start brainstorming all the supporting topics you want to get across and then “cluster” them into broader categories in order to make them easier to remember. (To learn more about his methodology, I recommend reading his book Presenting to Win: The Art of Telling Your Story.)
Jerry worked with our presentation team, which included myself, our CFO, CXO and our director of investor relations, through many repetitions to ensure we could create highly personal connections when telling our company story. The “test the waters” meetings gave us the opportunity to verbalize our story more than 20 times in a real-world setting and refine it as we went. All this preparation went a long way in solidifying our comfort and confidence levels during the investor roadshow.
An important commitment our presentation team made to each other going into each meeting was that we would make it better than the last one. We treated each one as if it was our first, full of energy and commitment. For me, that took considerable attention to sitting at the edge of my chair to stay centered. Each night, we regrouped and discussed how we could make the next session even better, and during our morning jogs, we practiced again. And it worked. Our very last meeting of the entire trip happened to be one of our best with a bank that has now become a top five investor and big believer in our story and our mission.
Put in the work: Nailing the Q&A
Here again, our training leading into the roadshow was invaluable. By the time we hit the actual roadshow, we had held two mock earnings calls with full Q&A from selected outsiders, running the calls as if they were real. We had enjoyed a successful testing the waters week several weeks prior to the IPO roadshow, and we had prepped in many Q&A sessions with internal audiences, our presentation coach and our bankers.
For the Q&A sessions that happen with investors leading up to IPO day, work with your team, bankers included, to compile a list of potential questions in advance. And again, practice your answers to make sure you’re conveying the true value of your company’s mission, purpose and direction.
Q&A becomes especially important a few days into your roadshow because potential investors most likely have already seen your roadshow video, met with you before (on the “test the waters” or group session), reviewed the S-1 and will not want you to present to them again. When you show up, they’ll be ready for you with a long list of questions, and that’s the entire meeting. It’s important that you leave investors with confidence in the CEO and CFO’s command of the business, which builds confidence in the future opportunities for the company.
Invest in your roadshow video
Creating a roadshow video is a critical and efficient way of conveying your message to the broad investor audience. It typically ends up around 30–35 minutes long and takes a lot of planning and perfecting to get it right. It also has to be consistent with SEC filings, meaning the legal, finance and investment banking teams should be partnering each step along the way. The “test the waters” roadshow helped us hone our messaging and gave us a good starting point for our video script. The video includes everything from the problem your product addresses and the market opportunity to your company financials and culture.
While some companies opt to let their bankers do most of the scripting work, and we certainly used our bankers to help refine the message, we preferred to collaborate internally among those of us who were on the roadshow and our communications and marketing teams. After all, who knows the company better than the people who live it day in and day out?
Like the roadshow presentation, we practiced, and iterated, and practiced some more. We were making changes to our script just days before it had to be finalized, but we knew we had to get it right. In the end, we had more than 20 rounds of revisions to it.
The video is your first impression — and may be your only one for the many investors that aren’t able to attend group meetings or secure one-on-one meetings slots.
Tune into real-time feedback
Once the roadshow started, we loved getting real-time feedback from investors. Our bankers gave us access to an app we could refresh after each meeting to see what orders came in, giving us an immediate barometer of how well our presentation and/or Q&A was landing. That insight into our conversion rate was effective feedback for us, as were our daily calls with our bankers, who would update us on what they were hearing from investors at the syndicate desk and help us understand how to address any lingering questions we could more effectively answer.
As an example, we received feedback that we could be more effective showcasing our strengths in relation to our competitors, so we adjusted our talk track, practiced and were pleased to see that any remaining questions on competition largely dissipated. As we made adjustments, our effectiveness increased and our conversion momentum continued to grow.
Being open to feedback throughout the process is really important. Use it to improve.
Take practical advice from those who’ve been there
Finally, it’s worth acknowledging that staying energized for the full length of the roadshow can be daunting. In this case, the little things count, and we took full advantage of advice from one of our board members who had been through it before:
1. Prioritize sleep and exercise.
2. Grab food when you can get it, because you don’t know when you’ll get a break. Keep plenty of healthy snacks handy.
3. Use the bathroom every chance you get. It might be awhile before you find another one. That turned out to be very handy advice, indeed.
4. Maintain a learner’s mindset. Be open to improvement — and positive about change, every single day.
5. As I’ve said already, make every meeting better than the last one.
There’s a significant commitment required to make your IPO successful. In taking the time to prepare and by bringing in additional resources to help refine your story, you can navigate everything with confidence, authenticity and grace. Beyond the roadshow, there are two more things to get right: Celebrating your successful launch and continuing to operate your business as usual — now as a publicly operated enterprise. I’ll cover those next.
Look for the next post in this series on how to successfully navigate your IPO journey, where we’ll share insights to help you create a meaningful experience — and enjoying (and surviving) the day.