ABOUT THE PANEL DISCUSSION:
These panelists serve up straight talk and occasionally dish on various aspects of going public, giving aspiring entrepreneurs an unvarnished view of the process.

In the mid-90s, Jonathan Bush started a health care IT business in the cellar of his Boston-area home, with the server sitting on a basement dryer. After a failed initial attempt to “create an incredible service experience around birth,” his team decided to focus on solving healthcare’s “insidious integrity problem.” Athenahealth set about providing billing and medical records services via internet to health care groups large and small.

The 10-year journey to public offering was bumpy, according to Bush. There was a great deal of pressure, with VCs pushing the timing, and “lots of swanky, large black cars would show up to talk about selling out opportunities.” His advice today, around setting an IPO price: “Push and squeal and rail, get a really good pricing committee, people that will get your back, and do not let your price go down unchallenged the night before.”

Gail Goodman’s company, incorporated in the founder’s attic in 1995, finally went public in the past year. It’s now a $50 million/year business service company focusing on email marketing for small businesses. She learned lots of things along the way, including “how to make money on an average of $33 per month per customer -- the answer is a lot of customers!” Goodman says the decision to go public flowed from the desire for “a huge branding opportunity.” And with a few dozen small competitors, going public “would create a nice game-over statement,” says Goodman.

She doesn’t paint the rosiest picture of the IPO process: “The whole investment banking industry is due for an overhaul…These guys are lingo rich…and try to snow you at every turn. It’s the worst client relation experience I’ve ever had.” She also frets that as an officer of a publicly traded company, there’s “scrutiny of every syllable that comes out of your mouth in a public setting.” You “can’t be a little casual, and that is the antithesis of my management style.”

Bruce Evans, who’s in the growth part of the private equity business, says he’s often in competition with the IPO market. He seeks companies with “reasonably high rates of historical revenue growth… and good business models, nice cash flow characteristics, and demonstrated profitability.” Evans says, “We do our best to convince people to take our money and not all want to.”

Jono Goldstein says that going public is one of many financing events for a company. “It’s the beginning of a serious journey.” Also, don’t assume that going public means liquidity: “Don’t plan on going public because you think it’s the end of the game. You’ll be seriously disappointed.” He notes that with a recession coming, “the metaphorical IPO window is probably closing.” In bad times, “I would worry more about the impact of economics on the company, and go public when the timing is right.”

NOTES ON THE VIDEO (Time Index):
Video length is 1:23:45.

Joseph Hadzima, Jr., President and chairman, MIT Enterprise Forum, and Managing Director of Main Street Partners LLC, thanks sponsors, and introduces Robert Buderi.

At 3:10, Robert Buderi introduces the forum. He then introduces each entrepreneur, and asks them to describe their stories.

At 6:11, Jonathan Bush begins.

At 13:22, Gail Goodman begins.

At 20:11, Buderi turns to the private equity speakers.

At 21:13, Jono Goldstein begins.

At 22:30, Bruce Evans begins.

Buderi then interviews all the speakers, asking a series of questions including:
How private equity financing fits into an IPO;
How private equity adds value to a company;
Why take a company public and whether the decision was difficult;
How the IPO offer went;
What Sarbanes-Oxley regulations mean for companies;
Whether recession will put the lid on IPOs;
How to deal with coworkers after an IPO.

At 1:06:32, Buderi invites live audience and emailed questions.