Venture Capital/Opinion/ Going public in the US? This is the most important document in the process The S-1 filing is necessary if you want to list in the US. Here’s how GitLab did it \Venture Capital Hoxton Ventures to add a new partner in April By Amy Lewin 17 February 2023 Venture Capital/Opinion/ Going public in the US? This is the most important document in the process The S-1 filing is necessary if you want to list in the US. Here’s how GitLab did it By Sid Sijbrandij Monday 12 December 2022 By Sid Sijbrandij Monday 12 December 2022 GitLab started in 2011 from a house in Ukraine with a vision that there was a better, faster way to make software. Fast forward 10 years and the team was standing on Nasdaq’s floor in Times Square in Manhattan, making history as the first company ever to live-stream its Nasdaq public listing. To celebrate the one-year milestone of that achievement, here’s an overview of what we learnt in the process. Though we see few tech companies listing now given the current markets, I know it’s a dream — and it will become a future reality — for many tech builders to go public. It’s never too early for companies to start learning about the IPO process, from how to communicate a listing to the documents that commonly get filed. For part one in this three-part series, we will focus on what we learnt while preparing the most important document in the IPO process, the S-1 Filing. Form S-1 is a filing required by the US Securities and Exchange Commission (“SEC”) for companies planning on an initial public offering. Physical addresses are not necessary The S-1 asks for basic details about your company, including your address. Good news for remote companies: physical addresses aren’t necessary to file for an IPO. We have been a 100% remote workforce since inception and when we filed, had more than 1,300 team members in 65 countries. We wrote “Address Not Applicable” in our S-1 filing where the address was requested. Initially, we received a comment from the SEC regarding an address where investors could send communications to the company, but after providing an explanation about being 100% remote, we were able to use the email address [email protected] in the footnote on the cover page. Work remote-first with your S-1 drafting process Typically, the S-1 is written and revised in person over many weeks. The process often involves going to the “financial printer” — a printer that specialises in printing financial documents — and sitting in a room together and flipping through hardcopy pages one by one. We drove a highly efficient process that minimised travel using Zoom, Slack, Workiva and Google Workspace. It took us under six weeks to compile our initial S-1 draft, drawing on our already established remote working processes. “This lent itself to more diversity of thought, which is something we champion” Additionally, at other companies, due diligence calls with the bankers are typically just handled by the chief legal officer and the chief financial officer, but we included subject matter experts from throughout the legal and finance teams to answer questions during this diligence process. This lent itself to more diversity of thought, which is something we champion. File the S-1 confidentially Thanks to the JOBS Act, if your company meets certain requirements, you can confidentially submit the S-1 form. Choosing to file confidentially can protect you from market speculation, especially if you don’t decide to go forward with the listing. Have an efficient process for responding to SEC comments When you file an S-1, the SEC routinely provides comments back. Don’t worry! These comments are expected. Comments from the SEC seek to ensure that an S-1 is in-depth enough to make investors feel informed when they read it. We were able to address the initial 16 comments (a fairly small number) from the SEC and refile quickly. We responded to the first set of comments in one week — though two weeks is more typical. Inspire with your founder letter Another increasingly common part of the S-1 is the founder letter. Most founder letters are one or two pages, but you can go beyond that. Mine included a 10-point plan to maintain our startup ethos (page 96 in the S-1), inspired by Amazon’s Day 1 letter and repeated verbatim in every annual filing since. This is your chance to communicate to investors and inspire them to come with you on a journey, so don’t be afraid to say more rather than less. Know when to be quiet There is a specific quiet period leading up to the IPO and continuing after the listing day when team members and people affiliated with your company (board members, for example) cannot be perceived as hyping the company. “Delaying initial public offerings when companies are ready to go public can significantly disrupt innovation” We were advised as a best practice to start our quiet period once we selected bankers for our IPO. The quiet period then continued through the 25 days after our stock started being publicly traded, which included the day of the IPO. The road to IPO is littered with horror stories and unintentional consequences as a result of “gun jumping”. This refers to selectively using financial information that has not been publicly announced. One internet giant risked a delayed IPO when an interview granted to Playboy magazine months prior, disclosing key factors about the business, was later published during its quiet period. Delaying initial public offerings when companies are ready to go public can significantly disrupt innovation and the negative effects can last for years. To minimise the risk of violating such laws and regulations, we prepared by following best practices by vetting our press releases and communications as though we were a public company roughly a full year before we actually went public. In part two of this series, I’ll share what we learned with the public livestream of our listing day and how we made it more inclusive to team members. Sid Sijbrandij is cofounder and CEO of GitLab. 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