All Money Is Not Created Equal

Chapter 19Runway's Story of Going Public

If you make it to the IPO stage, congratulations! It's more than a testament to your technology, business model, and hard work. It's vindication.

It's also a mixed bag.

At its best, Tom Raterman, Runway Growth Capital's CFO, describes the IPO process as “fun and invigorating.” “You're working on something that's monumental for the company that you've been building toward for years,” he says. “Assuming the stock trades as expected and the underwriters deliver on their promises, the day you go public can be one of the most exciting days of your life.” That's the upside.

It is also tedious and grueling. You have to manage the process and all the parties involved and their wants and needs, while at the same time, paying attention to your business. A negative event – in the market, in the economy, at your company – could derail the IPO process. “It's an exhausting process from start to finish – interviewing and choosing the underwriters, negotiating their positions and roles in the transaction, and determining economics,” Tom says of the downside. You have to build and maintain the data room for business due diligence, legal due diligence, and financial models and scenario analysis.

“All of the previous work has to be complete before anything else begins, including drafting the prospectus, developing all the input that goes into the prospectus, making sure that everything's catalogued and mapped and that you've got every piece of data to ...