By most accounts, getting ready for an initial public offering is a bear. For days at a time, a CEO must schlepp from city to city, pitching his or her company to skeptical investment bankers. Which makes a new development all the more surprising: now some veteran CEOs are advocating including European cities in the typical road show.
In the past a wind sprint through Europe was dismissed as a waste of a CEO's precious time and energy. But now proponents argue that some early European stops allow a CEO to get into a rhythm before facing U.S. investors. "We spent a few days in Europe, and it was very valuable," says Larry M. Augustin, president and CEO of VA Linux Systems, a company based in Sunnyvale, Calif., that sells Linux servers and workstations.
Prior to taking his company public, Augustin visited Frankfurt, Paris, and London last November. He figured that given the popularity of the Linux operating system in Europe, it would be a good idea to go where the excitement was, and a warm reception in Europe might help generate buzz for the company. And it did. "We found that there was a tremendous amount of understanding and interest for Linux in Europe," he says. Although the jaunt was time-consuming, the road show was ultimately a huge success. VA Linux set a Wall Street record on its first day of trading, soaring 698%.