Pre-IPO Media & Comms Strategy for Executives

You can’t escape hearing about SpaceX, OpenAI, and Anthropic lately. This, of course, is no accident. It’s IPO season among the AI juggernauts. And attention can be the difference between a successful raise and a failed one.

But the pre-IPO period isn’t a media free-for-all. It’s one of the touchiest seasons in executive comms. The SEC takes your communication strategy during this period seriously.

If you communicate well and within an approved timeline, pre-IPO comms can be an effective way to raise awareness and build authority. Done too little too late, and your IPO may become a target of an SEC inquiry, resulting in fines and delays. 

Just ask Google and Salesforce circa 2004.

Playing the long game 

When your organization is preparing to go public, the SEC demands all public communications related to your stock go through a single, SEC-approved prospectus. Under the rules of the Securities Act of 1933, anything outside of that is considered illegal hyping of your stock, aka "gun jumping.”.

And the SEC doesn't mess around.

Under the "gun-jumping" rules of the Securities Act of 1933, companies were severely restricted from hyping their stock in the media during the sensitive waiting period after filing an S-1.

Google experienced this firsthand in 2004. Founders Sergey Brin and Larry Page sat down for an interview with Playboy right before filing their S-1, but the magazine published the piece in August, smack in the middle of the waiting period. The SEC treated the interview as an illegal prospectus. To avoid derailing the IPO, Google was forced to attach the Playboy interview directly to its amended federal filings.

Only a few months earlier, the SEC had delayed Salesforce’s IPO on nearly identical grounds after CEO Marc Benioff gave a freewheeling interview to The New York Times.

The way to remain above board is to play the long game. You launch your pre-IPO media strategy 12 to 18 months before your offering. This gives you the runway to build your brand in public, allowing you to naturally soften your communications as you enter the SEC's quiet period.

Know your audience

Successful pre-IPO strategies are oriented toward winning over a key investor profile: Qualified Institutional Buyers (QIB). These are sophisticated professional investors, usually working on behalf of hedge funds, insurance companies, banks, and various wealth funds. 

All good marketing begins by knowing your audience so that you can work backwards from their interests.

In the case of QIBs, you know a few things. You need to promote your company in a way that is easy to promote. QIBs will be “selling” your stock once you IPO. They must convince managers, colleagues, and their clients that your organization is worth their investment. 

The best thing you can do, starting 12-18 months before your IPO, is to set a clear investment narrative through positioning. 

What investors want

Positioning is packaging. Your goal is not to pull one over on QIBs. They are, by definition, sophisticated investors. They’ve seen every attempt to give zombies a haircut. 

The key instead is to find (or even develop) your strengths and then put all your marketing power behind those strengths. This is why you often see companies have their first profitable quarter mere months before their IPO. Or why tech companies suddenly start winning security awards. They are firming up their finances and tech stack to look flawless to QIBs.

Your pre-IPO media and comms strategy is merely a positioning campaign to emphasize those strengths as you solidify them. 

You can usually distill those strengths down to a handful of categories of QIB interests: 

• Industry-leading product: For consumer apps, a good product is measured by a raw, exploding user base. But for complicated B2B software and enterprise services, Qualified Institutional Buyers (QIBs) look for structural stickiness. You must spotlight world-class Net Revenue Retention (NRR). You want to prove that once an enterprise client integrates your software, they stay for the long haul. 

• Financial powerhouse: This one is more nuanced. Defining a powerhouse could mean profitability, a high growth rate, robust cash reserves, or a high return on invested capital. Often, companies will hire an IPO-specialized CFO to tighten their books. Even this hire can be a source of good publicity. 

• World-class leadership: Often, this requires leaders to become public figures. You demonstrate your business prowess through interviews, strategic social media, or even by releasing a more authoritative medium, such as a book. It doesn’t hurt to give a few keynotes at major industry conferences. For more guidance here, consider an executive-led marketing strategy.

• A growth story: Institutional investors look to your existing users, product, and balance sheet. But they also look at your momentum. They want to invest in a company whose continued expansion seems inevitable. This is where fostering a public growth story around your company attracts investors (and notably: publicity). Everyone loves a good growth story.

• Industry dominance: Warren Buffett might call this establishing your moat. What are the competitive advantages that are unique to your organization and hard to copy? Emphasize your IP, network effects, or cost advantages. What can you do that competitors can’t copy? That’s the angle of your industry dominance story. You have a defensible advantage that a competitor cannot easily duplicate.

• Attention: I love Kyla Scanlon’s take on SpaceX’s recent IPO. She points out that investors now treat attention as a valuation tool. SpaceX's historic IPO was driven by this exact phenomenon. Companies that successfully leverage the media spotlight are rewarded with higher multiples than those compounding in obscurity. (Of course, it’s fair to ask: how much of that premium is simply Elon Musk being Elon?)

What QIBs really want is a combination of multiple factors. They want the growth story with world-class leadership. They want the industry-leading product that just had two profitable quarters back-to-back. You are already putting in the work to solidify these strengths. Your pre-IPO media strategy just means you tell the world about the work you’re already doing behind the scenes. 

The role of business leaders

A pre-IPO season is a critical one for business executives. Often, this season requires people who have always worked in obscurity to suddenly become public figures. You are now the face, voice, and mind of your organization on the global stage. This is doubly true if your organization sells complicated B2B software and services.

This is the premise of executive-led marketing. Everyone wants to hear from the top. Investors want to see the mind leading the organization. Customers want to learn about the product from the person leading its creation. Journalists don’t want to speak with your marketing department, but your leadership team. And team members (present and future) look to executives to understand culture. 

If they weren’t already before, the pre-IPO season is often when the chief executive becomes the face of their organization. 

This is where gun-jumping laws are a favor in disguise to business leaders. The SEC is helping you by forcing you to extend your time horizon. 

You can't build a brand in a month. But you can build one in 6, 12, or 18. So take advantage of it. Take advantage of this extra time to make your CEO famous, showcase the power of your product, build your growth story in public, and ultimately get institutional investors hungry to buy your stock long before it's made available.

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