text_examples/2p_financeipo_meeting_natural.txt

Speaker 1: Good morning, Patricia. Thanks for, uh, making time to discuss our IPO strategy. I'm James Harrison, Chief Financial Officer at Nexus Technologies. As you know, we've been privately held for, um, eight years now, and our board is seriously considering going public within the next eighteen months. I wanted to get your perspective as our lead investment advisor on the, uh, timing and structure.

Speaker 2: Good morning, James. I'm, um, excited to dive into this with you. Patricia Wells here, Managing Director at Capital Growth Partners. Based on the financials you sent over last week, Nexus is in an excellent position for a public offering. Your revenue growth of, uh, forty-two percent year over year and EBITDA margins of twenty-eight percent are exactly what institutional investors want to see right now. The tech IPO market has been, um, particularly strong this quarter, with companies like yours achieving valuations of eight to twelve times revenue.

Speaker 1: Those multiples sound, uh, very encouraging. We're projecting revenues of two hundred fifty million for this fiscal year, so that could put us in the, um, two to three billion dollar valuation range. Our current private investors, including Venture Capital Associates and Growth Equity Fund, are definitely interested in liquidity events. They've been with us since our Series C round three years ago when we raised, uh, eighty million at a six hundred million valuation.

Speaker 2: Exactly, and that progression shows, um, healthy growth in valuation. For the IPO structure, I'm recommending we target raising approximately four hundred million in new capital. That would allow you to fund your expansion into European markets, invest in your, uh, AI development platform, and provide some secondary shares for existing investors who want to realize gains. We should plan for approximately, um, thirty percent of the offering to be secondary shares from current shareholders.

Speaker 1: That secondary component is, uh, important for employee retention too. Many of our key engineers and executives have significant equity stakes from our early employee stock option plan. Being able to offer them some liquidity while keeping them incentivized with remaining shares will be, um, crucial for maintaining our talent base post-IPO.

Speaker 2: Absolutely. Now, timing is, uh, critical here. The IPO window has been favorable, but we need to be strategic. I'm suggesting we begin the S-1 filing process in Q2 of next year, targeting a public debut in, um, Q3. That gives us time to complete two more quarters of strong financial performance and avoid any potential market volatility around earnings seasons. We'll want at least, uh, six consecutive quarters of growth to present to investors.

Speaker 1: What about our choice of underwriters? I assume we'll need a, um, syndicate of investment banks to handle an offering of this size.

Speaker 2: So, I'm recommending Goldman Sachs as lead underwriter, with Morgan Stanley and, uh, JPMorgan as co-leads. For our sector focus, we should also include a tech-specialist boutique like Needham or, um, William Blair. The syndicate should be able to handle the full four hundred million dollar offering while ensuring broad distribution to both institutional and, uh, retail investors. Underwriting fees will typically run about six to seven percent of the total raise.

Speaker 1: Let's, um, let's talk about financial preparation. What do we need to clean up before we can file our registration statement?

Speaker 2: Your audited financials look solid, but, uh, we'll need to ensure full SOX compliance infrastructure is in place. That means upgrading your internal controls, formalizing your audit committee, and, um, probably adding a few independent board members with public company experience. I'd also recommend bringing in a seasoned CFO team member who's been through IPO processes before to help manage investor relations, uh, post-offering.

Speaker 1: We've already started conversations with, um, two potential board candidates who have public company experience in our industry. One is the former CEO of DataStream Solutions, and the other is the current CFO of CloudTech Enterprises. Both understand our, uh, market dynamics and growth trajectory.

Speaker 2: Those sound like excellent additions. Now, let's discuss the roadshow strategy. We'll want to target institutional investors in major financial centers. I'm thinking a, um, two-week roadshow hitting New York, Boston, San Francisco, Los Angeles, and Chicago. We should also include some virtual presentations for international investors in London and, uh, Hong Kong who might be interested in our global expansion plans.

Speaker 1: So, what kind of investor interest are you anticipating based on current market conditions?

Speaker 2: Given your growth metrics and market position, I expect, um, strong demand from both growth-focused mutual funds and technology-specialist investors. Your recurring revenue model and enterprise customer base make you particularly attractive to institutional investors looking for, uh, stable, scalable businesses. We might even see some strategic interest from larger tech companies, though we'd want to be careful about how that affects the, um, valuation process.

Speaker 1: That's all very encouraging, Patricia. What are the, uh, next concrete steps we need to take to move this forward?

Speaker 2: First, let's get formal board approval to proceed with IPO preparations. Then we'll need to select and engage our legal counsel, typically a firm like Wilson Sonsini or, um, Cooley that specializes in tech IPOs. We should also begin the auditing and compliance work immediately since that often takes, uh, longer than anticipated. I'll prepare a detailed timeline and cost analysis for the entire process to present to your board next week.

Speaker 1: Perfect. I'll schedule a board meeting for next Friday to, um, discuss the formal authorization. This is an exciting milestone for Nexus Technologies, and I appreciate your guidance through this complex process. Let's make sure we execute this flawlessly and, uh, maximize value for all our stakeholders.

Speaker 2: Absolutely, James. This is going to be a, um, tremendous success story. I'll have all the documentation ready for your board presentation, and we can begin engaging the underwriting syndicate as soon as we get, uh, board approval. Congratulations on reaching this significant milestone.