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SPLX

Leadership, My Personal Journey

SPLX IPO 15 Years Later

May 3, 2016 1 Comment
15 years is a milestone I think. Short enough that I still remember, long enough that is seems far in the past.We took Simplex public 15 years ago today. May 3, 2001. It was the culmination of a wild ride, and the beginning of another. Going public is a rite of passage. It’s not a birth (founding a company), it’s not a marriage (M&A), it’s not a death (shutting down) so maybe it’s like a bar mitzvah or confirmation – a rite of passage into adulthood. You take a company public when you are large enough that you want to fund the company into the next phase of growth on the public markets, and you want to provide liquidity to your investors. In 2001 that meant revenue of about $50M was needed, profitability, and steady, predictable growth which we had. We loved our company, and we were proud of our technology and our customer relationships.

With the Simplex IPO we threaded the needle between two significant market crises. In April 2000 the dot com bubble burst. We were not a dot com, we were a real company in the semiconductor space selling very nerdy software to chip designers. We filed our first S1 on September 11, 2000. Yes, 9/11 but a year earlier. (Actually we sent the docs to the SEC on Friday Sept 8 but we missed the cutoff so the filing date was 9/11).

Even by Sept 2000 there was little appetite on Wall St for a tech IPO because everyone had been burned by tech valuations based on a faddish bubble. But by late March 2001 we still needed cash to keep growing (we were opening international offices and hiring people behind our growth). I met with Larry Sonsini and Frank Quattrone (both kings of the Valley at the time) and we all believed we could price the deal. So we went on the road.

One of the most intense experiences of my life. 3 weeks of meetings 7-8 meetings every day. Paris, The Hague, London, New York, San Francisco, New York, Chicago, Minneapolis, Dallas and finally Houston. I drank too much vodka and took smoking back up for the 3 weeks (I did quit again at the end thank goodness). I lost 12 lbs in 15 days because I was not eating much. It seemed as if I was always presenting over breakfast and lunch so when was I going to eat?

And then, on May 2, in the late afternoon in Houston, we priced the deal, sold 4 million shares to CSFB, brought in $44M in proceeds for Simplex and hopped on the private jet to New York to be there for the market opening the next day. I slept on the plane, but not much when I got to New York.

May 3 was a round of interviews. Radio, Bloomberg TV, CNN’s finance network at Nasdaq, and time on the floor with the CSFB trader who was making the initial market in SPLX stock. We opened at $12 and closed over $21. The book was 11X over subscribed and we were one of the very first tech deals to get done successfully in 2001, opening up the market for many more that had been waiting. Maybe we priced too low, maybe not, there was no way to know because the market was so skittish.

But, of course, we were only public for 4 months before September 11, 2001 hit. The market collapsed, our customers delayed orders and our stock dropped to $8. A violent roller coaster is too gentle a term for what this felt like. The gripping stress of how to make sure the company, our employees and our customers were OK. When Cadence approached us to buy us in January 2002, a deal we eventually closed on June 2, 2002 for $300M, it was the right outcome for the company. As one of my board members told me “there’s a war coming, you are too small to survive it”.

Paris – walking around jet lagged the first evening

 

Walking around Paris on Sunday, relaxing before the whirlwind starts (with Luis Buhler, CFO)

 

Agent Herscher, on a helicopter very early one morning headed to
New Jersey from Manhattan for a presentation

 

 

The view of Manhattan from the helicopter

 

 

 Showing Melanie and Sebastian the private jet at SFO

 

 

How I often spent my time on the jet – not so glamorous!
Our typical ride around New York

 

 How Aki (Aki Fujimura COO) and Luis would often spend their time in the limo
Getting used to the cycle of meetings and flying – don’t we look smart!

 

My classic pose, talking to our lawyer (Bob at WSGR) or the bankers. I loved that flip phone.
Signing the docs to sell the shares to the bankers
Hugging out the tension with Aki once it was done
The team including Richard and David from CSFB

 

Headed to NY to watch the market open and celebrate

 

Watching the SPLX stock start to trade

 

The stock hits $20
Doing a TV interview back in Sunnyvale in my office –
the success of the IPO was Silicon Valley  news – maybe the market hadn’t died (yet…)
Leadership

PR over exposure is a dangerous game

May 24, 2012 Leave a comment
Eric Jackson wrote a painful piece in Forbes this morning comparing Sheryl Sandberg to Kim Polese – and while I don’t agree with his judgement that they are alike (one is wildly successful, one less so) he throws a bright light on one of the risks that can plague female tech executives: over exposure.
The over exposure starts because when you are a fresh new female executive you are rare and a novelty. The press wants to cover you because your opinions are new grist for the mill on everything from technology, to child care, to diversity in the office. Your PR team loves it – it’s an easy way to get the press’ attention and get the ink on the company. When I was a new CEO in 1996 I ended up on the cover of the San Jose Mercury News – amusing but of no value to my company Simplex. The press I got that was useful to Simplex was tech press and then business press around our IPO, not the many panels I did on being a female CEO with two small children.

Over exposure is a deadly trap. In the end you are judged ONLY on your financial performance, and unless you think a great deal of press coverage about you is going to drive your top line results you need to tread very carefully. Kim Polese was extraordinarily over exposed. She was naive, and taken advantage of by her PR firm but she was young, pretty and articulate and so a great product for them to sell. But Marimba did not prove to have legs after the bubble burst and while there is no shame in that per se – that’s life in the Valley – it was a long way to fall for her celebrity, and was not necessary.

I put this observation into practice a few months ago at FirstRain. We were choosing a new PR agency and I had been clear with my team that while I was happy to do panels and talks on technology, or even on public board experience (I am on two public boards RMBS and JDSU), I am not willing to overload on the female tech CEO talking circuit. So imagine my irritation when one of the PR firm leads decided that the whole strategy should be to use my gender to get FirstRain in front of the press and would not shut up about it.

In Sheryl’s case the risk was lower than Kim’s because she was already a proven
executive at Google, and Facebook’s a juggernaut, so she is
also already successful there. Extensively exposing her to the press in the year
before the Facebook IPO made sense – she is then “known” to the
investment community and the retail investor and so could carry the revenue end of the IPO
roadshow. And if she has larger ambitions post Facebook (who knows…) then the positive exposure raises her name recognition at a national level.

It’s a fine balance. You can only be a role model, mentor and adviser to young women if you have a successful track record. And yet the thirst for female tech role models is so great that once you have a high profile position you get given the stage – and it’s tempting. My input to my team is never, ever lose sight of the end-in-mind which is business exposure for FirstRain (or Simplex last time). The “woman CEO” platform comes after that and in service of that purpose only — unless I am doing it on my own time.