cloudedjudgement.substack.com · 2020-07-07
· 2158d
What It Takes to Become a Public SaaS Company: Part 2 - The IPO Process Demystified
This article provides a comprehensive walkthrough of the SaaS IPO process, analyzing 37 recent SaaS IPOs to benchmark pricing mechanics, float dynamics, and first-day pop phenomena. The author argues that the current IPO process is fundamentally broken due to low float supply, institutional investor power imbalances, and artificial pricing pressures that benefit large funds at the expense of companies and retail investors.
Metrics in this report
Average First-Day IPO Pop
35%percent
average
37 SaaS IPOs analyzed
IPO Float as Percentage of Outstanding Shares
5% to 25%percent
range
SaaS IPOs 2018-2020, typically low single-digit to mid-20s
Implied Forward Revenue Multiple Discount to Comps at IPO Range Midpoint
-42% to 1%percent
range across 37 companies
SaaS IPOs 2018-2020
SaaS IPO Price Range Increase During Roadshow
16%percent
median
26 of 36 SaaS IPOs that raised ranges
Share Price Change from IPO Price to Lockup Expiration
61%percent
average
SaaS IPOs with 6-month lockups
Share Price Change from IPO Price to Lockup Expiration
39%percent
median
SaaS IPOs with 6-month lockups
Typical IPO Lockup Duration
180days
standard
Pre-IPO shareholders restricted from selling