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Business Insider: The Former CFO for Salesforce and Pandora Has Some Advice for Startups Avoiding the Public Markets: ‘Go Out Sooner Rather Than Later’

Alexandra Hamer

Alexandra Hamer

From the STA Conference in Washington, DC — The former chief financial officer of Salesforce has some simple advice for startups eyeing the public market: Don’t wait.

Steve Cakebread helped steer the software company through an IPO in 2004. He’s also spent time as Pandora Music’s CFO and currently serves in that role for publicly-listed branding company Yext.

And so as private companies continue to skirt the public markets, Cakebread has some pointed advice.

“I am a big advocate of go out sooner rather than later,” said Cakebread while speaking at an industry conference Thursday in Washington DC.

Cakebread said companies decision to remain private longer is a “disservice.” Instead, they would be better suited to deal with a more diverse group of investors early on as opposed to just a small, subset of elite investors such as venture capitalists, hedge funds and private equity.

“Create the volume and opportunity for a wide range of investors, whether they are retail or institutions,” Cakebread said. “Not participating in that growth puts a company in a whole another realm of investors. I am not sure that is beneficial to everybody right now.”

Several high-profile companies that finally choose to list this year have had brutal introductions to the public markets. Uber, Lyft and Peloton have all underperformed since their IPOs. WeWork, meanwhile, shelved its public float after facing major backlash following the release of its S-1 filing, seeing its valuation crumble.

“The bigger you get the growth starts to slow down,” Cakebread said. “If you dont have the growth you have these different valuations in the public market.”

At the same conference, Stacey Cunningham, president of the New York Stock Exchange, said the trend of companies forgoing the public markets to continue to raise money privately is one that is “problematic to society more broadly.”

Cunningham, who spoke on a panel with Cakebread, said a company’s decision to remain private is actually widening the wealth gap.

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