What you should know about prepping your startup for the public markets

It’s been an active four quarters for technology IPOs. If you rewind the clock to Q4 2020, we’ve seen megawatt public debuts from tech shops of all sorts. Airbnb recovered from COVID-19-induced lows to list, while Roblox delayed its IPO and went out with a direct listing. DoorDash went public. C3.ai had an explosive offering late last year as well.

Things have largely continued in 2021, with IPOs throughout the first and second quarters leading to debuts from Freshworks, Toast and, most recently, filings from GitLab, Rent the Runway, NerdWallet and others.

Many startup founders aspire to an IPO, even if the average time horizon for the liquidity event has now stretched as capital flows into the private tech market. But how to get a company ready for an IPO isn’t normal fare in startup conversations — it’s a bit like talking about your 21st birthday when you are in middle school. Sure, it’s a thing that will happen someday, but not much of a pressing concern.

You’d think so, at least. The prep process for going public is actually somewhat long if done well, and startups might need to get started with prepping their operations for the public markets earlier than they think. It’s a topic that we explored during TechCrunch Disrupt 2021, where I hosted a conversation with Lux Capital Partner Deena Shakir, Madrona Managing Director Hope Cochran, and CrowdStrike CFO Burt Podbere.

The entire discussion is embedded below, but I’ve pulled out a few key moments for those of you who are more reading-based learners than video-watchers. Topics follow by subheadline, with the video at the bottom. Enjoy!

You can prep too early

Heading into the conversation, I expected to encounter three folks all nodding their heads sagely, intoning in unison that startups can’t really start IPO prep too early. That was not what I wound up hearing. Cochran said this, following my question about how early a startup should start prep for its public debut:

You hear many people talk about, Oh, you need to start thinking about going public really, really early” and building that rigor. I’m actually more on the camp of: “Let’s let the company run and be agile for a while and put in processes as they’re needed.” You will get there in the appropriate amount of time.