Bankers, Advisers Give CFOs Tips on How to Avoid Surprising Investors

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SoftBank Vision Fund conference focuses on how finance majors can navigate the process of taking a company public

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Speakers talked about what a CFO should look for in a Bookrunner and how they should communicate with investors and employees when a company’s stock price drops on its first day as a public company, among other topics.

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The Vision Fund has poured billions of dollars into startups and late-stage companies. Twenty-three of them went public this year, and more than a dozen other Vision Fund-backed companies have announced plans to IPO or merge with SPAC. The CFO and other executives from about 80 of its portfolio companies attended the conference last week, including executives from office-sharing firm WeWork, Singapore-based app company Grab Holdings Inc. and autonomous-driving company Cruise, which is owned by General Motors. Is. Co.

Balancing cost control with development

“Finance heads should enable growth by allocating funding, but also closely monitoring costs,” said Masayoshi Son, chairman and chief executive of Vision Fund’s parent SoftBank Group Corp. What we always need is that healthy debate. do we have enough cash do we have enough [customers], Do we have enough liquidity?” Mr. Son said that CFOs play a vital role in balancing the company’s expansion with its cost base. “You have to tell your CEO… ‘Don’t waste money. Don’t spend too much money.’ But, when it is necessary, you have to say, ‘We have the money,'” said Mr. Son.

Quickly select bankers and bookrunners
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Panelists at the FinConnect Summit advised CFOs to start building public listings by building relationships with bankers and analysts. “It’s good for you to get to know these potential bankers well before they go public,” said Jennifer Cernan, a former CFO who sat on the boards of several technology firms. “Understanding the analysts is a very important component of going public – who is supporting you on the analytical part?”

When it comes to selecting a Bookrunner to assess a company’s financial and market conditions to determine the opening price and volume of shares, Ms. Cernan recommends selecting some of the top candidates. ,[Have them] S-1. Create business section of [a securities filing] And say, ‘How would you tell our story if you were us?'” needs to happen, especially in cases where there are two or more bookrunners, Ms. Cernan said. “I was just transparent and said, ‘This is what we’re going to pay,'” she said, adding that she was a previous CFO. Referring to the situation, he said.

stick to your guesses

Laura Onopchenko, CFO of car-sharing platform GetAround, said finance heads of companies looking to go public need to build up their forecasting and planning capabilities early. It is important to gain credibility among investors, he added. “You have to make long-range plans that have six-quarter forecasts,” Ms Onopchenko said, adding that building a relationship with Wall Street is essential to providing visibility into future performance. “If you don’t have [Wall Street] On your side, it is such a game changer,” she said.

This remains true once a company goes public, said Darlene Pasquil, head of Mizuho Financial Group. Inc. NS

Equity split. “Everyone knows the importance of under-delivering and over-delivering on growth and earnings,” said Ms. Pasquil. “Set expectations properly, be flexible and update in real time if there is a physical change,” she said. “You don’t want to be surprised,” she said.

Companies should be able to meet their guidance once they go public, said Eric Haeckel, global head of alternative equity solutions at Deutsche Bank. AG

, “We spend a lot of time preparing our companies,” said Mr. Haeckel. “You can’t miss Q1, Q2,” referring to the first- and second-quarter earnings reports after listing in the markets.

keep your accounts in order

Companies should build out their reporting and accounting functions at an early stage to prepare for a potential IPO or SPAC merger, said Richard Tem, vice president of finance at Aurora Innovation. Inc.,

Provider of autonomous-vehicle technology. “If you choose to be earlier in the journey, then when the time comes, you are not running around,” said Mr. Tem. Aurora, which has about 1,600 employees in total, with about 23 in the finance function, closed its merger with SPAC earlier this month and now trades on the public markets.

Focus on the Right Metrics

CFOs should think about what metrics to use to communicate information about their company and prepare for listings, said Cassandra Bujarski, managing director of Sard Verbinen & Co., a communications firm. This is especially important when a company files its S-1 with the SEC, Ms. Buzarsky said. “We see that it’s extremely important to have something on the business, whether it’s a key metric that you think is extremely important to investors, or if it’s something about the makeup of your business,” she said.

Dan Dolev, an analyst at Mizuho, ​​said companies should actively seek out investors and analysts if there are any problems, for example if they don’t meet their goals. “Make sure you spread the word before it becomes an issue,” Mr Dolev said, adding that market sentiment is largely driven by narratives. “If you assume the problem will disappear, it will return,” he said. Executives can further manage their companies’ messaging when they can reach specialized analysts after reporting earnings. “I think the dialogue helps them to refine and refine the message over and over again,” said Mr. Dolev.

What about stock price?

Ms Onopchenko said CFOs should prepare for the first day of trading and put in place strategies to manage employee expectations, especially if the stock doesn’t pop or fall shortly after listing. “Every employee is going to be obsessed with the stock price,” she said. “We need to get ahead of the day when the stock price is not where you want it to be,” Ms Onopchenko said.

Aurora’s Mr Tem recommends trying to avoid becoming emotionally attached to a certain share price. “If you watch this every day… you’re just going to waste energy,” he said. Still, CFOs need to keep track of their company’s stock price so they can answer questions from investors.

Finding a New CFO Job

Mark Long, CFO of used car leasing platform Fair.com, said it’s important for finance executives to stay in touch with peers to explore future career opportunities. “Don’t call me once every two years,” said Mr. Long. “Keep an active dialogue and let that network grow.”

Nina Trentmann [email protected] . Feather

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