Pure Storage’s CEO on Choosing the Right Time for an IPO

When Pure Storage did its IPO, in October 2015, the company was six years old and had completed six rounds of private funding. It could have gone public a year or so earlier, and the CEO realized that waiting entailed risks. In fact, the IPO market was cooling, and companies were pulling their offerings as a result. But staying private longer may have significant advantages as well. In retrospect, Dietzen believes that the timing worked out well for Pure.

Among the factors that influenced the decision to wait: Sarbanes-Oxley has made it more expensive to be a public company; staying private would make it easier to fend off M&A interest; and the precedents set by Google and Facebook, which waited much longer than venture-backed companies have historically, drove a change in the conventional wisdom. Nevertheless, Pure’s customers encouraged an IPO, because many of them preferred to do business with a public company, whose financials are available for scrutiny.

In preparation for the offering, Pure gave employees flexibility with their stock options, expanded the board, and hired a strong CFO. Happily, in the months surrounding the IPO, two key competitors were distracted by internal events. Although the company’s stock price has fluctuated, Dietzen says, today Pure is a fast-growing and healthy business.