In 2015, Atlassian was preparing to go public, but it was not your typical company in so many ways. For starters, it was founded in Australia, it had two co-founder co-CEOs, and it offered collaboration tools centered on software development.
That meant that the company leaders really needed to work hard to help investors understand the true value proposition that it had to offer, and it made the roadshow deck production process even more critical than perhaps it normally would have been.
A major factor in its favor was that Atlassian didn’t just suddenly decide to go public. Founded in 2002, it waited until 2010 to accept outside investment. After 10 straight years of free cash flow, when it took its second tranche of investment in 2014, it selected T. Rowe Price, perhaps to prepare for working with institutional investors before it went public the next year.
We sat down with company president Jay Simons to discuss what it was like, and how his team produced the document that would help define them for investors and analysts.
Always thinking long term
Simons said co-founders Scott Farquar and Mike Cannon-Brooke always had a vision of building a public company from the early days.
“Mike and Scott were intent on building an iconic, multigenerational company. They were always talking about a company that outlasted them. And one of the examples that we always used was Hewlett-Packard, in that they wanted to build a company that stood the test of time,” Simons said. That aspiration was associated with their desire to behave with the discipline of a company that was publicly traded.
“Being a public company demands a level of athleticism and rigor and accountability and discipline in planning and thinking and execution,” he said. “And so I think if you set your sights on being an iconic company, more than likely you will choose the path of being a publicly-traded company because it sort of raises your game.”
It’s worth noting that when the company accepted funding in 2010 from Accel and again in 2014, these were secondary investments, meaning the investors were buying equity directly from the company’s founders and employees. As a result, the first time it raised primary capital was at its IPO.
Moving beyond Australia
Long before the company decided to go public, Atlassian began expanding internationally. By the time the team began drafting the roadshow deck, it had offices in San Francisco and Austin, along with a robust international customer base.
“We were proud of our heritage [as a company started in Australia], but we definitely positioned ourselves as a global company. We had a really strong concentration employee base in both San Francisco and Austin by the time we decided to go public, and we had customers in 140 different countries with 50,000 active customers at the time, and so we were a significant global company,” Simons said.
He said their origins also meant they had to cultivate international markets from early on. By the time the company went public, he said, unlike a lot of startups at that stage, half their market was in North America and half was in other countries, and that was a big selling point for investors.
Simons said the roadshow deck they would create was adapted from the deck they developed when they approached VCs in 2010 for the first round of investment capital. That would eventually lead to a $60 million investment from Accel.
“In many ways that [early investor deck] was the first version where you had to really explain the business, and not just at a high level kind of value proposition to somebody that would potentially buy the software. We needed to explain the business and how it operated and what our financials looked like and how we thought about our market opportunity and what we thought was unique about our company, our business model and our culture.”
Well before Atlassian filed an S-1, big banks began expressing interest in getting to know the company, believing correctly that it would eventually go public. So they prepared a presentation for bankers that introduced the company and explained its mission to people who may not have been familiar, an exercise that also helped them create their roadshow deck.
“This particular deck continued to evolve and take shape from those conversations as we used it,” he said.
Getting down to business
Once the company decided to file for an IPO, it hired a bank and began drafting the S-1 document that would announce its intent to go public. As they went through this process, it laid out much of the information the company would want to include in the roadshow deck.
“There were parts of what we already had communicated in deck form that we could incorporate into the S-1 in a narrative form, and then parts of writing that long-form narrative that we wanted to incorporate back into the deck. A relatively small team worked on both the S-1 document and then recalibrating the deck around the S-1 and vice versa,” Simons said.
The process began in August 2015, but the roadshow deck went through dozens of iterations until they crafted the final version in November 2015. The team also prepared a video of the presentation; around that time, companies were moving away from releasing videos with talking heads standing in front of a backdrop, so they decided to improve their production values.
Hitting the road
Once the deck was ready, the company hit the road and delivered the presentation across the country, starting on the West Coast, moving through the Midwest and ending up in New York City.
They rarely presented the deck start to finish as most investors had seen it ahead of time; instead, presentations tended to be more interactive with attendees asking questions. “Nobody wants to just watch an infomercial, so we were digging into things that either weren’t totally clear to them in the deck or there was a level of detail that they wanted to try to see; so it was not uncommon to have it be conversational,” he said.
The roadshow team flew their spouses out to NYC to meet them for a free weekend, took in a Nets game and a Broadway show and generally relaxed before they went public on December 9, 2015. If the first day was any indication, the offering was a rousing success finishing up 32% on a valuation of $5.8 billion.
The company went public at $21 a share. Today the price sits at more than $188 with a market cap above $46 billion. It seems to have all worked out just the way they planned when they started thinking of going public all those years ago, but there was no way to know that when they sat down to write the deck. No matter how well prepared they were.
By Ron Miller