Going public is an exciting moment in many companies’ journeys. It’s both a sign that a company has reached a certain level of maturity, and an opportunity for greater visibility and access to capital. But the process of going public can also help motivate and energize employees, Matt Skaruppa, CFO of Duolingo, told CFO Brew.
A goal everyone can align around: Skaruppa, who joined Duolingo in 2020 and took it public in 2021, said going public “is a unique moment in time to drive the deepest strategic alignment through from the top to the bottom of the business” because “the whole company has the chance to rally around the incredibly exciting goal.” It helps get everyone on the same page about what they’re doing, why, and what market they’re targeting, he said.
The long-term nature of the IPO goal is also salient, he said: “Nobody goes public to get public and then stop being public,” he said. “You go public because you think you’ve built a durable business that can last 100 years.”
Skaruppa and his team made the somewhat unusual choice to share news and updates about the IPO process with employees at all levels. “We would get in front of the entire company and talk about it at all-hands meetings,” he said. “[We would] tell people about our plans and what we are going to say publicly about our strategy and what it meant.”
Then, staff could give them feedback that helped them shape their messaging, he said. Employees would ask questions like “‘Do we do that? Is that true?’” he said. “And then you can refine” what you’re saying, he added.
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That’s not the typical way IPOs are handled, Skaruppa said. “There’s a lot of intuition from certain investors and board members that you’ve got to keep that conversation tight and small,” he said, to prevent leaks and perhaps save face in case things don’t work out. There are legal concerns to be aware of as well when sharing IPO information. “Those are all thoughtful counterparts or counter arguments to what I’m saying,” he observed.
However, Skaruppa argues that the IPO isn’t an opportunity to be missed. “It is a risk worth taking to take that once-in-a-company-lifetime moment and organize everyone around the same goal,” he said.
Recruiting tool: Being open about Duolingo’s IPO plans came with an additional benefit: It made the company more appealing to accounting and finance talent. “I didn’t find it terribly hard to attract incredibly talented folks, because I got to say, ‘If you come work here, I don’t know when we’re gonna do it exactly, but we’re gonna go public,’” Skaruppa said. “When you tell folks that are talented and ambitious that you get to work at a great business that’s also likely to go through something that they want to go through, I think that was very helpful.”