Jan 2, 2019 · 30m · a16z
a16z Podcast | The Curious Case of the OpenTable IPO
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z podcast, former OpenTable CEO Jeff Jordan and former Bank of America Merrill Lynch ECM Head JD Moriarty unpack OpenTable's successful 2009 public offering during the peak of the global financial crisis. They share critical insights on IPO timing, institutional investor relations, roadshow execution, and navigating unexpected public market crises.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The host holds 18.4% of the talking time here. How this is scored →
The host as informed peer 3.6 Guest teaching 4.4 Guest disagreement 1.6 The host pushing back 3.0
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:43 Rejecting the CFO stereotype
Jeff Jordan flatly rejects the host's framing that CFOs are just spreadsheet people who cannot articulate technical stories, stating 'if your CFO can't tell the story, you need a new CFO.'
Hardest push from the host ▶ 27:56 Challenging public market quarterly pressureThe host directly challenges the public market model by raising the common criticism that going public ties companies to a ridiculous quarterly measurement of innovation.
Biggest teaching moment ▶ 28:08 Reframing quarterly reporting pressure using Jeff BezosJeff Jordan educates the host on public company management, explaining that quarterly pressure is optional if executives set clear long-term expectations from the start, pointing to Jeff Bezos as prime proof.
The host holds their own ▶ 10:09 Citing Pixar CFO Lawrence Levy on pricing frictionThe host demonstrates domain research by invoking Pixar CFO Lawrence Levy's account of fighting Steve Jobs over IPO pricing to push the guests on their own pricing conflicts.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| The Role of Banks and Long-Term IPO Preparation | 3 | 5 | 1 | 3 | The host asks basic introductory questions about why investment banks are needed for an IPO, but offers a reasonable counterpoint regarding liquidity needs for founders and early investors. The guests educate the host on the 180-day lockup mechanics, long-term investor alignment, and the Stanford case study on IPO windows. | |
| Allocation Tactics, Pricing Pop, and Investor Selection | 5 | 5 | 2 | 4 | The host demonstrates preparation by bringing up Lawrence Levy's CFO perspective from Pixar regarding IPO pricing friction and asks whether 'discussion' was a euphemism for fighting. The guests explain allocation tactics, reasons why a stock 'trading too well' can leave money on the table, and the rationale behind prioritizing tentpole long-term investors over short-term momentum money. | |
| Board Dynamics, Internal Insulation, and Roadshow Discipline | 3 | 5 | 3 | 4 | The host probes internal board disagreements and challenges whether a CFO can effectively communicate a technical story, stereotyping CFOs as purely spreadsheet-focused. Jeff Jordan directly refutes this framing, asserting that an effective CFO must be capable of telling the company story. | |
| IPO Roadblocks: Patent Lawsuit and Delayed Market Opening | 2 | 2 | 0 | 0 | This segment is primarily narrative retelling by the guests regarding last-minute IPO impediments, including a patent lawsuit and a delayed opening due to an SEC clerical error. The host acts as an engaged listener with minor interjections. | |
| Market Evolution, Post-IPO Guidance, and Lessons Learned | 5 | 5 | 2 | 4 | The host raises substantive questions about small-cap IPO trends and the common criticism that public markets force a short-term quarterly measurement of innovation. Jeff Jordan counters by citing Jeff Bezos's approach to public leadership and explaining OpenTable's deliberate choice not to provide quarterly guidance. |
Statements from this episode (16)
Jordan: No venture-backed tech company IPO'd for years before OpenTable
“A venture-backed technology firm had not gone public in a couple years.”
Moriarty: Mead Johnson was the only 2009 US IPO before OpenTable
“And the only IPO prior to Open Table in 2009 was a company called Mead Johnson, so a very defensive company, the type of thing that should go out in 2009 in consumer products.”
Jordan: Elite companies can execute an IPO in any market environment
“The best companies often open windows that were then previously closed. So the best companies can go out whenever they want. The good companies typically want to wait for, till the investors are feeling good. The mediocre and bad companies want to get out When…”
Jordan: Late-window IPOs consistently underperform in public markets
“And what happens when the window opens, the early people to go out typically perform very well as public company stocks. And then as more time goes by and you get towards the end of a window, the companies that then are going out kind of rushing, I got to get …”
Jordan: Merrill Lynch was not a top-tier tech bank in 2009
“All due respect to Merrill at the time, they were, you know, they were not the top of the pyramid in terms of tech bankers, so we, because we were the only IPO, we had every bank wanted to do it.”
Jordan: OpenTable's 2009 IPO was oversubscribed 20 to 25 times
“Yeah, I know. So when we the original documents had a 12 to 14 dollar price range, I think we updated it to 16 to 18 over the course of the roadshow, because the roadshow was going well. The first two investors said, I want a full allocation. So it quickly bec…”
Jordan: CEOs should prioritize long-term IPO investors over maximizing price
“And I would do that again in a second. I'd advise management teams to do it like crazy because as a CEO managing a public company, you don't want people who are in and out on momentum, hot money, because you spend then all your time literally marketing to new …”
Moriarty: Involving too many employees early in IPO prep is a mistake
“And in fact, one of the mistakes that we see companies make periodically is, is one, building employee expectations towards an IPO too early, and two, involving too many people.”
Jordan: Replace any CFO who cannot tell the company story
“But if your CFO can't tell the story, you need a new CFO.”
Moriarty: Three executives is the maximum team size for IPO roadshows
“We often ran into management teams that wanted to have too many people on the road. Three people sort of the outer number”
Jordan: Patent trolls sue companies during IPO roadshows for maximum leverage
“They wait till you're on the road, point of maximum leverage.”
Jordan: OpenTable's IPO trading was delayed by an attorney's filing error
“Turned out the attorneys had, when they did the last turn, had attached the wrong attachments. The SEC had proved something. That we actually knew was Erroneous. And so if we started trading on erroneous document, there's a chance the SEC could say, no, no, no…”
Moriarty: Time IPOs based on business readiness, not market conditions
“Time the IPO for your business and your team, including your board and investors. Don't time it around the market, time it around at the right time for your business.”
Jordan: OpenTable grew in the teens at IPO, then accelerated significantly
“We were in the teens growth year over year growth rate. According to the analyst models, when we went out, that's not really a strong growth company. Then we increased growth in the 30, 40 plus percent.”