The Pre-IPO CFO Shuffle
Think fast: what do hot IPOs like Zynga and Groupon have in common? Those two companies both swapped out their CFOs a year before they filed to go public. Zynga, for example, tapped a former investment banker with Allen & Co. and paid him handsomely.
The move is so common in Silicon Valley that pundits will often assume that a startup is planning an offering just by making that single key personnel change.
Sometimes the drivers for such a move are obvious. A startup’s CFO might originally be the founder’s roommate and have little else in the way of qualifications, for example. Still, there seems to be a mystique surrounding the IPO process that suggests only someone supremely qualified should be involved in doing it.
What skills or qualifications does a CFO really need to take a company public?
Answers
Company: in-between
Your question is good, but ultimately comes down to a simple answer. The large financial institutions that buy into IPOs want to be sure there aren't going to be any hiccups after the company is public. There's nothing more solid than a CFO who has run a public company before and knows how to get all the ducks in order before someone else spots a problem.
Company: Zeidler Associates
We haven't seen a lot of IPOs recently in Tampa, but one thing I can tell you is that when a company gets to a certain size, the finance team has to have connections. Sometimes that's banking connections (like if they're going to do an IPO) or Private Equity connections. Other times it's just knowing other CFOs at other companies that counts.
Companies of a certain size deal with a lot of wacky issues that you wouldn't expect or get any training on in school or as a CPA. That's when a CFO who knows a lot of folks in the community can really shine. It's great that some of that community can now live online at places like this!
Company:
I totally agree with Nathaniel's comment; I am in Silicon Valley and the number one criteria for being a CFO of a public company is experience at a public company and the ability to show that the CFO has been able to manage the growth of a company to scale. In the Dot bomb era in 1999 and 2000, there was a shortage of good finance people so you did not need that experience in the past to land such a job but the story is different today.