SaaStr 788: The Real Data on What it Takes to Go Big and Eventually IPO with Meritech Capital | The Official SaaStr Podcast: SaaS | Founders | Investors | Podwise
This podcast episode from SaaStr discusses the requirements for a SaaS company to go public (IPO). Alex Clayton and Kathy Choi of Meritech, a late-stage venture firm, present qualitative factors (strong story, team, growth, operational excellence, predictable performance) and quantitative metrics (ARR, growth rate, net retention, free cash flow) crucial for a successful IPO. They highlight that while ARR at IPO has significantly increased over time, durable, long-term growth, rather than rapid growth alone, is key to post-IPO success, exemplified by companies like HubSpot and SPS Commerce. The speakers emphasize that only about 20 SaaS companies achieve IPOs annually, necessitating a compelling reason for investors to choose a given company. The episode concludes by advising that achieving a successful IPO requires a combination of strong qualitative and quantitative factors, and durable growth is critical for long-term success in the public markets.
