An IPO that leads to:

  • a market cap north of $1 billion; and
  • shows either positive cash-flow or an extremely healthy balance sheet,

checks a very important box for enterprise-level/CIO-level buyers.

Large companies are looking to not just buy a tool for today, but to invest in a vendor that can scale with their needs for 5+ years. CIOs implement business process change, and they want to dial-in that change with a trusted vendor, and realistically, only revisit it every 4–5 years.

Before you IPO, you can still get a pass if you don’t meet these critera. You can send over your financials (just do this, don’t argue). You can get a pass as an “emerging vendor” and a CIO’s office will just understand they are taking more risk working with you. Every enterprise and CIO’s office knows how to take the incremental risk for an emerging vendor that offers novel functionality that they really want to implement.

But a public company (IPO)+ with a very long runway, and which is by definition publicly audited = the box CIOs really want to check. And in being toward the top of a magic quadrant or two, and you sort of become the default choice in the F500 and Global 2000.

(The average small business by contrast probably doesn’t care.)

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