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Bursts of Color - Yelp's IPO Anniversary

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Bursts of Color - Yelp's IPO Anniversary

Geoff Donaker
Mar 3, 2022
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There's plenty of dark international news this week, but I'm putting that aside briefly to commemorate a special day for Yelp. Ten years ago yesterday it debuted as a public company... meaning it has now been public noticeably longer than private (10 vs 8 years).


That's a big banner

Like College Graduation

I think that an IPO for a company is something like college graduation for a young adult. It's a special moment that calls for celebration and reflection. Beforehand there's often community support, with latitude to change directions and make some youthful mistakes. Afterwards you're generally expected to be a grownup and have your act together. And in both cases, it helps to pick the right timing that's neither too early (why cut the fun years short?) or too late (when you're no longer up-and-coming).

For those of you eyeing an IPO sooner or later, the following is some more context about Yelp's experience in those years.

6am watch party in the SF office

Historical Financials

At the time of IPO, Yelp was close to $100m revenue, growing >80% per year and burning very little cash. We also had pretty good visibility and confidence for the next year, which helped in our first few earnings reports. Here are some annual numbers:

  • 2009 - $25m rev, ($1m) adjusted ebitda

  • 2010 - $48m revenue, ($6m) adjusted ebitda

  • 2011 (1 year pre-IPO) - $83m revenue, ($1m) adjusted ebitda

  • 2012 (1st year public) - $136m revenue, +$5m adjusted ebitda

  • 2021 (1oth year public) - $1b revenue, +246m adjusted ebitda

Waiting for trading to start from the stock exchange floor

Financial Team and Infrastructure

Beyond the business results, we assembled a solid financial team and infrastructure before IPO that included:

  • Experienced CFO (Rob!) who had seen and done it before

  • 20+ person finance team with dedicated support for Accounting, Tax, FP&A, Payroll, Collections, Financial Systems and Investor Relations

  • 3 years of audited financials

  • Appropriate board composition with an independent audit chair (would have been better to do this earlier than we did)

  • Oracle financial system (today Netsuite and Workday also have public-ready options)

Ringing the bell

Timeline: The Year Before IPO

  • March 2011 - Decision to put IPO wheels in motion

  • April 2011 - Began recruiting public-experienced CFO

  • August 2011 - Rob joins as CFO

  • September 2011 - Goldman & Citibank selected as lead bankers

  • October 2011 - "Org meeting" kick-off with bankers & lawyers

  • November 2011 - S-1 filed, revealing financials for first time

  • February 2012 - Roadshow to pitch hundreds of investors

  • March 1, 2012 - Final pricing set and IPO becomes official

  • March 2, 2012 - Shares trade publicly, Jeremy rings the bell

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