Navigating IPO Readiness and Financial Discipline

How do you know when a company is ready to go public? And what do you do to prepare for this? Chirag Shah, CFO of Motive and former CFO of Kong and Cornerstone OnDemand, joins CJ to share insights from his experience of scaling businesses from $30 million to nearly $1 billion and tripling ARR. He talks about taking companies public and how he helped take one private again in a $5.2 billion deal. In this episode, he explains what signals indicate that a company is ready to accelerate its growth, the art and science of building sales capacity, and how to balance efficiency and growth in hypergrowth mode. He also covers how to achieve a great valuation without a strong performance, the biggest headache on the road to IPO, and whether you should IPO in the first place or remain private.

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LINKS:

Chirag Shah on LinkedIn: https://www.linkedin.com/in/chirag-shah-787b1b20/

Motive:

https://gomotive.com/

CJ on X (@cjgustafson222): https://x.com/cjgustafson222

Mostly metrics:

http://mostlymetrics.com

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TIMESTAMPS:

(00:00) Preview and Intro

(02:11) Sponsor – Tabs | Rippling Spend | Pulley

(06:25) Personal Product Market Fit: Preparing Companies for IPOs

(10:34) How Being a General Manager Made Chirag a Better CFO

(15:02) Sponsor – Navan | NetSuite | Planful

(18:11) Asking Better Questions in Finance

(20:08) Signals That a Company Is Ready To Accelerate Its Growth

(25:10) The Art and Science of Building Sales Capacity

(28:35) The Dangers of Adding Too Many Sales Reps

(33:22) Determining the Numbers of Recruiters and Sales Manager Interviews

(35:03) How To Garner a Great Valuation Without a Strong Performance

(37:18) The Sweet Spot for Earnings Guidance

(41:22) The Biggest Headache on the Road to IPO

(44:03) Underappreciated Challenges of Being a Public SaaS Company

(46:42) Taking Cornerstone OnDemand Public and Then Private Again

(50:17) IPO or Stay Private: Advice for CFOs

(52:15) Optimizing for Public Company Holders Versus Private Equity Investors

(55:05) Balancing Efficiency and Growth in Hypergrowth Mode

(58:34) Long-Ass Lightning Round: Preparation for Being a CFO

(01:01:34) Advice to Younger Self

(01:04:04) Finance Software Stack

(01:05:01) Craziest Expense Story

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