* "I'm more disciplined, efficient, and focused."
* "I have more financial savvy."
* "I'm a better communicator."
* "I'm more analytical and consider more perspectives when making decisions, and I take more time."
CRASH COURSE
"We were within a couple of weeks of filing when the stock market crashed. I was visiting customers and one of them said, 'Hey, did you know the stock market dropped 500 points?' It was, to say the least, disconcerting. It took about three nanoseconds to decide that we ought to pull out. I had announced our plan to go public a month before at a company meeting. 'Why would we not go public?' someone had asked. I told them, 'The only thing that could really change our plans would be if the stock market crashed or if Britain invaded Iran.'
"Back at the company on Black Monday you could feel the emotional deflation. The press made the average consumer very nervous. Employees kept asking, 'What does this mean to me personally? How does this affect the company? Should I take all of my money out of the bank?' Very quickly, I started reading about the Crash of 1929, so I could explain what was happening -- to employees and to myself. I talked to a couple of economists. I talked to an investment banker who is also a Rhodes scholar. Everybody was at a loss to explain it; consumer confidence is a very complex thing. As I started to get an understanding, I made company presentations. We had meetings every Friday morning.
"I put in place some data-collection mechanisms to find out if our business was going to slow down. I asked our senior salespeople to talk with our customers' sales managers. Are any capital-spending programs being deferred? they asked. Any canceled? There was nothing, absolutely no effect.
"I thought it might take a year for us to finally go public. But the investment bankers called in mid-January, just three months after the crash, and they said the time might be right. "Come give us a presentation," I said. "I don't want to do anything stupid." The slight downside was that the IPO would be priced lower, but the tremendous upside was that when people buy low and sell high, they feel positive. And there was nobody competing for investors' time; during our road show we could ask for a four-hour lunch and they'd all come.
"We were the first high-tech company to go public after the crash. It was an exhilarating time. The companies that went public afterward should be sending us a check for opening it up to them. "
-- Robert Cohn, CEO, Octel Communications Corp.
(#54), Milpitas, Calif.
CULTURE SHOCK
Is there companywide fallout from the IPO process?
Yes, said 77% of Inc. respondents. Their most frequently mentioned comments:
* "Long days, emotional roller coaster."
* "Motivating for employees and CEO."
* "Employees enjoy climate of IPO and public arena."
* "Physically and emotionally very draining."
SECOND TIME AROUND
"We raised money twice, first in May 1986, then in August 1987. Raising public money is much smoother the second time around. I'll bet it'll get even easier if we go for a third.
"The first time, investors are enamored of the sizzle; they get to believe you are heading for the moon. The second time you attract a different kind of investor, a professional, sophisticated investor who deals with larger sums of money. They are mostly interested in forecasting and in your growth pattern. I could tell that the people who saw me the first time were thinking, Who is this huckster? I was a loose cannon and I was firing rapidly. The attorney used to pound me over the head and say, 'No projections.'
"By the time we went back, though, we were a public company with fiduciary responsibilities. The investors figured that if I said I needed the money for an acquisition, they could believe me. And we didn't get distracted by the process. The first time, our business really suffered during our appeal to the public. When we finally got the money, we weren't sure what direction to head in. We had spent so much time trying to be good children that we actually constrained the growth of the business.
"I know now I could have been much more aggressive on the first offering. I went around hat in hand. I was unsure of myself, and I was overly impressed with the ability of these investment bankers to write a check and instantly change your life. The thing about going public is nobody is doing you a favor. Not the underwriters, not the investors. Everybody needs to do these deals. "
-- Jason Bacher, CEO, AutoInfo Inc.
(#38), Maywood, N.J.
WE RECOMMEND . . .
Any tips for IPO-bound CEOs based on your experience?
Advice from Inc. respondents:
* Before going public, run your company as if it already is.
* Make sure your have a management team capable of taking over operations for six months.
* Tell your company's story simply and honestly; be totally up-front.
* Don't go public until your business is mature enough to produce consistent quarterly results.
* Evaluate a potential IPO as you would any other financing option; don't overglamorize it; look beyond liquidity.
