Twitter’s Mike Gupta, ’97, who led the tech giant’s 2013 public offering when he was CFO, advised students to view a public stock offering as a financing event, not an end goal.
Launching an initial public offering (IPO) is an amazing event, but public status brings a higher level of scrutiny, Gupta told Booth students at a recent campus appearance. Gupta now is Twitter’s senior vice president for strategic investments.
“It’s one of many options you have to finance your company,” he said. “Good companies think of it as a milestone, not an end goal.”
Gupta answered questions in a conversation with dean Sunil Kumar as part of the Deal Talks speaker series. Questions were submitted by students in the audience; many focused on different aspects of leading a high-profile tech industry IPO.
Gupta led the social media company’s November 2013 public offering. Before joining Twitter in 2012, he held senior financial positions at Zynga, a provider of digital games, and at Yahoo. Prior to joining the tech industry, he was a vice president in the investment banking division of Merrill Lynch & Co.
Gupta told students that it’s important to think about the process of getting to an IPO. Start building the infrastructure to prepare for going public: start getting audited financial statements, get internal controls in place, and work on the ability to report to the Securities and Exchange Commission as well as to investors.
IPO readiness also requires operating discipline on the product and financial sides of the company, he said.
“On the product side, if you happen to miss a ship date for some code, it’s not great but it’s not visible to the rest of the world,” Gupta said. “As a public company, that kind of miss can have a more noticeable impact. It can impact your financial forecast, so there is a ripple effect.”
On the financial side, public companies need to be able to hit their targets and projections.
“As a private company, if you’re under or over (financial targets), it doesn’t matter as much,” he explained. “In fact, being well over (a target) is often viewed as a great thing. But as a public company, if you miss your estimates, it adds pressure.”
During and after an IPO, the management team must be fully aligned so that a consistent message is delivered to investors, he added.
Drafting the initial registration statement required by the Securities and Exchange Commission is a defining moment for many companies, he said. “It’s easy to describe what you do in an elevator pitch. But when you put pen to paper to define the company for the world to see and refer to, that’s a lot harder than you might think.”
Gupta advised the students to be patient about their career progression.
“I see there’s this desire (by younger employees) for expanded responsibilities, management responsibilities, and I think that’s fine,” he said. “But I found that being patient and working toward a long-term objective reaps dividends.”
Student Gautam Kshatriya said the message of patience was sound advice.
“Being patient, taking the long-term perspective is really important,” Kshatriya said. “We’re so caught up in the moment and sometimes feel we have to accept the first thing that comes to us. It’s important to remember this is a journey.”
Gupta said he took advice from his father when it came to his career: “Whatever you choose to do, do something that gets you excited about getting out of bed and going to work every morning.” —Debbie Carlson