Hanging out at Snap’s unremarkable IPO roadshow

One of the remarkable things about the roadshow presentations for hotly-anticipated IPOs — where they’ll make a pitch to investors and answer questions — is that they are often unremarkable.

That seemed about the same case for Snap, which was presenting to potential investors at the Mandarin Hotel in New York this afternoon. Over lunch, a packed ballroom 30 stories up at the hotel listened as COO Imran Khan and co-founders Evan Spiegel and Bobby Murphy answer questions about the future and viability of Snap as a public company. The last we’d heard from Snap was when it lowballed its potential IPO valuation as it inches closer to its public debut next month (which is what usually happens).

One attendee summed it up the roadshow pretty nicely: a lot of the people at the roadshow presentation are there to check a box and make sure that no one misses anything. For a looming IPO as massive as Snap that’s doubly important (as it was for Twitter), but sometimes it’s really not all that exciting.

The Snap executives were asked all the questions you would expect from investors — and ones that have been circulating in the community for some time now — according to attendees on their way out. How will Snap respond to slowing DAU growth? What about slowing engagement? What about Evan Spiegel and Bobby Murphy’s control over the company?

Snap was a camera company, pointing to Spectacles as one example. It had some work to do on Android, where problems may have affected its user growth and it’s an area it needs to fix going forward. Snap’s answers seemed standard enough, as they’d probably answered the same multiple times already, from what attendees were saying as they exited the building carrying little yellow Snap prospectus notebooks — which include all the financials and data publicly filed for its IPO.

These are all questions Snap is going to face as it goes on the road and especially begins its march up to its IPO. Snap’s very young advertising business is growing quickly, but its costs are ballooning. It has to face the challenge of being compared to Twitter with its slowing user growth and monetization that doesn’t come close to Facebook’s. Investors, in the IPO, are buying shares that have no voting rights in the company. And Facebook is nipping at Snap’s heels with clones and copycats of a variety of its products.Tech observers, in general, have more questions than excitement about Snap going into March that could make the IPO a complete toss-up.

Investors and attendees, piling in like sardines in the elevators (around 12 to 14 at a time), made their way to the roadshow where they were asked to have a business card and a photo ID. It was all suits, jackets and pea coats for the most part with the bankers sporting the look that you would expect if you envisioned someone ready to drill Snap executives on questions about the future of the company. One trip up included nearly 40 people riding three elevators, opening up to a room already full of another 30 people signing in. By 12:30, the room was loaded with people seated at long square tables and many standing off to the side.

Checking a stopwatch, it took about 3 minutes and 18 seconds from entering the Mandarin Hotel and riding the elevator to the 36th floor where the roadshow presentation was happening to being aggressively surveilled and then politely (and sternly) told to leave the room. This is really par for the course for a roadshow presentation, and harkens back to Twitter’s roadshow back in 2013 (which I recall it took about 2 minutes). Instead, the process wasn’t really about Snap’s devotion to secrecy, but rather just the dance that pre-IPO companies play at these presentations.

The presentation would last about an hour where food would be served. One attendee said he “thought it was turkey?” with a sort of questioning tone at the end. It’s not all that surprising — Twitter served chicken and it’s a thing that’s quite easy to scale up to a larger audience for lunch, a good strategy if you’re looking to cook a large meal for a lot of people.

One floor down, after jumping over a rope blocking off the stairs to the 36th floor, was the lounge where you could see some mixture of people waiting to prod exiting attendees for details about the presentation and typical hotel guests that were just there to hang out and have some lunch, and probably didn’t know what they were getting into. With an hour to kill, coffee’s not a bad idea — though a Cafe Latte was about $14 including tip at the hotel. (Come on, man.)

snap roadshow mandarin

Then, dead silence, and no one walking out. You could see some people picking a staging ground, normally outside the bottom elevators that exit onto Columbus Circle.

At around 1:15 p.m., attendees began trickling out, interspersed periodically with the obviously-dressed non-bankers and investors. There would be a mixed crowd that would just comment lightly that it was “interesting” and that they really didn’t say anything of note. Others would talk a bit about how there really wasn’t anything new that they were talking about. The rest would politely walk straight by without saying anything, head out the door and make a turn toward the street passing by a scrum of reporters on the way out — not even hailing a cab or calling an Uber.

But really this is all color to just paint a picture of how utterly normal this presentation was for a company that is going to be one of the largest tech IPOs in recent memory, and one that’s supposed to set the stage for tech IPOs in the future. Attendees clamming up as they exited the building was not a product of Snap’s secrecy, but rather just how these things go at roadshow presentations — and how the song and dance plays out as Snap inches towards its IPO.