M A and IPO Preparedness

Our topic here is going to be talking about considerations. Really, it says IPO and M&A preparedness, but it's as much about lessons learned in the context of the IPO or M&A. Let me introduce the panelists who we're really thrilled to have, and then I'll introduce myself. We've got David Ticharia here, who's the CEO of MongoDB. As you guys know, Mongo's really one of the pioneers in the New York enterprise ecosystem. Dave's been the founder of multiple technology companies over the years, over his over 20 years of experience, and really, through board and other relationships, been involved in the launch of many more. I think what's most relevant for this panel is that he was the founder and CEO of BladeLogic, which Neeraj mentioned. He took the company public in 1997. 2007. Oh, 2007, yeah, 2007, sorry. Okay, I didn't want to date you too much. Sold the business about a year later, right, to BMC, so has really seen the life cycle throughout a company from all angles in a leadership role. Lonnie Jaffe, who's here, also has been in the industry for over 15 years, former CEO of Syncsort. He recently sold his company about a year ago, maybe a little bit less, to ClearLake Capital, now remains an advisor to the company. I think also, interestingly, has had stints in senior roles in corp dev inside companies like IBM and CA so can give us some perspective about, from a large potential strategic acquirer, what he has seen as well. And I'm Anand Subramanian. I'm a partner at Catalyst. For those of you who may not know us, Catalyst is a small, 100% partner-owned advisory firm. We focus only on the technology sector. We advise companies either in the context of M&A or in the context of private capital raising. So, we'll start maybe a little bit around the IPO. And these days, it's very easy to, especially where multiples are right now, where how easy it is, relatively speaking, still to raise capital, the availability of capital in the private market. When you look at the owner-risk requirements of being a public company around Starbucks, when you look at the focus on quarterly earnings and the pressure that can create day-to-day, it's certainly not in vogue to run out to the IPO market these days. I'd like to just see, is there anybody else, anybody here who has been a public company CEO? Raise your hand. I think we just have one, okay. Anybody here who's been in a leadership position in a company who has gone public? Okay, three more. Okay, how many people have been at a company when they went public? Any role? Still not that many, okay. So, Deb, I'm gonna give you the task where it's not cool to go public right now, and if everyone public here, that would be bad for my business. Give us, sell them on why they should go public at the point in time that makes sense to them. Great. First of all, I just wanna thank everyone for coming, and for the longest time, I thought I was the only enterprise software guy in New York. So, it's great to see people like Raji and Amir and David and Olivier and everyone else here. So, it feels like the enterprise party is finally happening in New York City. In terms of going public, I would say there's really three reasons to go public. One, for obvious reasons, it's a liquidity event, and that's important not only just for your investors, but also for your employees, because at some point in time, they do wanna see a return on their investment and their sweat equity. The second reason, which not many people actually realize, but it's actually a branding event for the company. It's a way to essentially, it's kind of your coming out party. And what's interesting is that, that follows the third reason, which is that your customers actually think you're smarter. And it's kind of funny to say that, but literally, the week after we went public, deal flow became that much easier. People suddenly felt, you suddenly felt like you were at the adult table. Vendors, I mean, customers took you seriously. There wasn't so much of the M&A overhang of like, gee, is someone gonna buy you? Is Oracle gonna buy you? And we have to sign up to some onerous contract. Nevermind that actually, there's a lot of M&A of public companies, but customers do view you as kind of a real company, and that becomes pretty attractive. And then you just, in some ways, one of the things I feared was like recruiting. And when you show, obviously, everyone wants to join a pre-IPO company. One of the things that you show companies who've really executed well, is that 90% of the value creation happens after IPO. And so, but that is obviously, requires a little bit more education, but that is also something that can be overcome. One other thing I would add is transparency. And we're seeing that be an increasingly prevalent reason for medium-sized software companies IPO-ing these days, is you're basically showcasing your financials, your business model, your traction, your historical momentum to the market. And especially in financial services in New York, which we all see here in the New York ecosystem, that becomes extremely important. Dev, what, as you think back to the IPO process, and actually being a public company CEO, right? Maybe share with the group, the thing that surprised you most, to the upside and to the downside, where you just said, you know, what did I get myself into? Why did I ever go down this route? Maybe a little bit. Yeah, I mean, I think, again, back to the sales acceleration that happens going public. And again, you know, when I was building BladeLogic, this was, we started the company in 01. And, you know, as we were dealing with customers, I had many customers who negotiated in the contract that if we were acquired by certain companies, one of being then the URL company, CA, like they were allowed to get out of the contract because they had like nightmares negotiating at CA. Now, I think people argue that should be Oracle as the vendor they don't wanna negotiate with. And so the sales acceleration was really, you know, surprising to me. I mean, literally, you know, you just felt like you were dealing with them on different terms. In terms of the downside, there's a ton of investment you need to make on legal, accounting, and all those investments. And when we went public, Starbucks was much more stringent today. And we didn't have the benefit of confidential filings we have today. I mean, then if you actually filed your S1 and went public, you know, it was all there for everyone to see. And if you never went public, that was a massive impact on your brand. So you had to be very, very sure that you were going public. And that meant you have an incredible amount of visibility in your business, that you had a team in place, that you were operational already, that you financially, you closed your books on time, that you had, you know, comfort with your auditors that they would support your decisions around revenue recognition. All that, you need to be very, very good before you press that button to go. And once you went, you know, if you decide to make a U-turn, it was incredibly painful. Dave made this point a little earlier around a lot of the value creation is after the IPO moment. But I worked on a piece of analysis recently that showed that since 2009, if you had the option to exit to a strategic acquirer at your IPO price, and then reinvest the proceeds in the S&P 500, you would have been substantially better off 10% per year on average. And so obviously there are some companies that are exceptions, but the idea that the IPO is a, you know, exit and you go to the beach and everything is finished is not actually what happens in practice. It was a little different after 2001, 2002, because the IPO valuations were so low. So it really was a thing where after you IPO, the stock prices tend to run up because the starting price is low. Yeah, so I've been involved directly with three IPOs. I was a section 16 officer with a company that went public in 1999. And then I was a board member of a company, I was on a board with Neeraj, that went public in 2010. And then I was here to play logic public. And the first company that went public, going public did feel like the end of the finish line. We kind of had our victory dance. We had a big party. Everyone calculated net worth based on what the stock price closed that day. And everyone was feeling good. Then you have the, oh ---- moment. When you wake up the next day and says, oh my God, our stock price is here. We have a whole new shareholder base who expects to see value creation from here above there. And we weren't just ready to go public. We weren't ready for that. Because we had thought the race was over and what we just realized, we're just a new chapter of the company's history. And we weren't ready operationally, we weren't ready culturally, and we weren't ready emotionally. And that was really, really eye opening for me. So when I thought about taking my logic public, we behaved as a public company, minimally two years, if you're still here, can speak to that. We operated the company as if we were public every quarter in terms of how we ran the business, where we made our investments, the rigor around our financial reporting. And so when we did go public, it didn't feel very different. In fact, the only difference is now there's a ticker symbol that moved, sometimes because of things we did and sometimes because of macro events in the market. Yeah, and that's a great point. And the fact that the pre-IPO market now is so dominant with public investors, right? I think it's forcing companies to instill more of that discipline at least a year in advance, because you know that the financials you show a year in advance are gonna be exactly what they pull out on your IPO roadshow to see how you did. Anything around expenses, anything you said you were gonna do from a readiness standpoint, really instill some of that discipline. So I think the market's moved that way to force companies. But even if they think they're ready, to your point, it's probably harder than most people think, yes. Okay, why don't we, let's switch gears and talk a little bit about M&A. And Lonnie, question really, I'll start with you and then come to Dave, but just at Catalyst, we spend a lot of time talking with private companies. First of all, companies are not sold, right? They're bought. And we spend a lot of time with companies who have no intention of selling within a year or two years, or how do they plant the right seeds so that if an offer shows up, they are equipped to then optimize for the outcome in that situation where they weren't for sale, but got something that was potentially attractive and have the ability to then optimize with a couple of other parties. In your seat at IBM and CA, what did you see that, as a potential acquirer, the mistakes that private companies often make either in advance or during that process when they have an opportunity maybe to get to a great outcome on both sides? So I'll separate, it's a long answer, but I'll separate it into two pieces, the financial legal stuff and then the strategic. So there's a lot of misconceptions, I think, on the financial and legal side. Simple things like how to treat deferred revenue, right? So if you collect a lot of cash up front for multi-year contracts, which is something that's more popular these days with software as a service and subscription-based business model, all that gets parked on your balance sheet is deferred revenue. And if you get acquired by a strategic acquirer, it all evaporates in what's called a deferred revenue haircut. And now, if you're being acquired by Salesforce or another company who has investors who don't care about boring things like GAAP EPS, then this doesn't matter. But if most public companies, if they do an acquisition like that, it'll blow a crater in their GAAP earnings, sometimes for many years in a row. And it can be an insurmountable obstacle to a deal that otherwise they would have a lot of strategic heat around. Another thing that feeds into that same dynamic is the behavior of stock options, whether or not they invest on change of control. So if stock options invest on change of control, and actually a lot of companies intentionally make them so they don't in order to retain employees' past acquisition because they feel like it increases holding power. What happens there is the acquirer then has to expense the stock options after over many years. In some of the fast-growing companies, 50% of employee compensation is in the form of stock options, so it's a huge portion of the expense base that is now absorbed by the acquirer as expense, which lowers GAAP EPS. Whereas if they do invest on change of control, all of the stock options get treated as purchase price accounting and get parked on the acquirer's balance sheet as goodwill. And they only get impaired later if the acquisition ends up being unsuccessful. And so these are small tweaks that you can make. You can't do these changes at the moment of acquisition. If you do, the acquirer's accountants will back them out. But if you can plan a little bit ahead, you can make yourself a lot less unacquirable or even potentially more acquirable. There's some legal things that are really common that you see people not pay attention to, even surprisingly large companies. IP ownership issues, whether they've accidentally contaminated their code with GPL. If you're an open-source company, this is less of an issue, but if you're a proprietary software product and you're being acquired because of the value of that product, a lot of times the acquirer can't integrate that product with the rest of their portfolio if it's been contaminated with GPL without open-sourcing effectively all of the rest of their IP. Or even the relationship with employees, especially offshore employees. If you don't have the right contracts in place, you might have accidentally given all of your intellectual property to your employees without realizing it. And these are things that an acquirer will definitely look at during the M&A process. It's not like they might not notice. And a lot of times they'll walk away from a deal because it's like, look, I'd love to buy the company, but I just can't buy a company if I'm not gonna get any of the intellectual property. On the strategic side, I mean, the nature of a synergy case for an M&A transaction, really, it's actually pretty simple. There's only really three pieces to it. You acquire the company and you give them lift because now you own them instead of them being standalone. They give you lift because maybe their tech is useful or their go-to-market or their install base is useful. And sometimes there's cost synergy, although in most growth-oriented acquisitions, that's a relatively small part of the synergy narrative. And in enterprise software especially, the leader will often take somewhere between 30% and 40% of the revenue in a market, but 120% of the profit, right? And everybody else will run at a loss because there's zero marginal cost. And once you've built the product, you just sell as much as you can to recoup some of the initial cost. So you wanna be a leader in the space. If you're not a leader, people are no longer very frequently, it used to be that people would fill in gaps in their product portfolio with acquisitions. That's pretty rare these days. Mostly, I wanna buy a leader in a space that's sustainably high value, that has defensible barriers to entry, good secular growth characteristics, and I wanna buy the leader so that I can have a leadership position in that growth area and then this thing can absorb more capital. So right now, I'm in a situation where my revenue is flat, but I'd like my revenue to be growing and this thing that I'm acquiring can absorb capital productively, whereas none of my existing businesses can. And in that area, you wanna make sure that you're focusing on markets that are attractive and attractive means not just large and growing. People look at TAMs and growth rates as the things that make a market attractive. Those are important, but they're not the whole story. A lot of it is, are there 150 other players in this space and another 20 getting seed funded and is Facebook open sourcing a thing that does this thing and it's better than yours and everybody's already using it. So focusing on attractive markets with leadership products also is important. So, I mean, it depends a little bit on the nature of the exit. So if you're IPOing, deferred revenue can be really wonderful, right? Because if you have a really big deferred revenue balance, it shows to the public market that you're gonna, that revenue is essentially guaranteed. You've already collected the cash. You're just recognizing it over time. If you're looking to exit to a strategic, as I was mentioning, like Salesforce, where they're not necessarily focusing on profitability as their primary metric, this also may be a situation where you wanna have a lot of deferred revenue because you show guaranteed subscription growth. But if you're looking to potentially exit to a strategic acquirer that does care about gap EPS, you'd wanna minimize the deferred revenue. So one fix you can do is, instead of collecting all of the cash upfront for five-year subscription deals, you could collect one year at a time. You could still lock them into five years of subscription, but if you only collect one year of cash, then you don't have a deferred revenue balance. Stock options, it's basically the same dynamic. You can sort of toggle things towards more vesting on change of control or less vesting on change of control, depending on the nature of the acquirer that you're targeting. Dave, would you add anything? I mean, you, as a board member, advise companies when they've entertained an offer, as a CEO, dealt with potential acquisitions on the private side. Any other pitfalls you see people make that you would add to this? Yeah, so at BladeLogic, we actually had four hard offers before we went public. And actually, we had an offer right before we went on the roadshow. Someone offered us a pretty sizable fee to basically not go public. And it was an interesting debate because at various stages, there's always the balance of greed and fear. And so I think Lonnie did a great job of talking to the mechanics from the acquirer's point of view. But when you're a seller, this really comes down to the confidence you have in your business and your ability to execute. And if you're very confident, you can pretty much forecast your next couple of quarters, if not your next couple of years of performance. And so for you to sell, your time horizon's a lot longer. Whereas if you're feeling a little nervous about your business, you're not sure you're gonna make your number by the end of the year, then you're gonna, frankly, be more open to a valuation that measures you and your current value today. So we had four different offers of different acquirers. Some were kind of, it was kind of like a drive-by diligence. Hey, if you're interested, here's the price. And we said that we're not that interested. And then two very, very large firms got very, very interested. And there was some debate. And the interesting challenge is this really also tests the mettle of a management team, especially, and I, my co-founder and I had been with another company. I said it was a company that we took public in 99. And both of us saw immense value on paper and saw the majority of it all disappear pretty quickly when the bubble burst. And so we both had a little bit of fatigue from that last experience and anxiety. And so when there was real value in hand, there was a lot of debate about, do we take the money and run, or do we kind of continue to go up to bat and keep operating the business? And there was some tension because my co-founder's family was extremely nervous about seeing all that wealth disappear again because of what they had seen when the bubble burst. And that really tests the mettle of the team. We worked through those issues. But one of the things I've encouraged all of you is to have those conversations early in the process. What kind of outcome are you looking for? Are you in this for the long haul? Are you looking to hit a certain number? Or are you looking to, what's your definition of success? And if you don't have that conversation, if you have that conversation in the specter of some M&A transaction, it's gonna cloud issues. And acquirers are gonna be very, very good at being able to separate people, and especially not just people within the management team, but also, say, the management and the investors. And so that then leads to the next question about your investor syndicate. There's some people who came in early, and so the value being proposed is a huge return on that investment. They can declare victory. They may be raising a new fund, or it may be a young partner who wants to put a notch on his or her belt. And there's all those dynamics. And then it could be someone who's coming late, and for them, they say, hey, I didn't sign up for this. I think I wanna see this company grow another three to 5X. And so that creates some very, very interesting dynamics, and depending on the voting rights of your syndicate, and it's more than just voting rights. It's just the emotional baggage that happens. You get a lot of conflicting feedback. So we had to work through all those issues. And again, you need to be prepared to sign up for all that. So if you're raising money at a huge, there was a discussion about valuation earlier. If you're raising money at a huge valuation, recognize that those investors will not want you to sell right away. So what you may think to be a great offer will be a pretty uninteresting offer for that investor or that syndicate who came in that round. But those are all issues that you have to think through. Yeah, and the last point is particularly, I think, potentially even more exacerbated, as we're now in a cycle where we're in the longest period of time before companies have gone public, right? We're somewhere over seven years. And you also look at venture capital return, distributions to LPs is at one of its lowest levels in many years. So that dynamic is going to really come to play as some of these strategic alternatives come out and working through those, as you said, early, as early as possible to understand where everybody is, is a critical part of the dynamic. So that's great input. One other question, and then we'll take other questions. Just maybe a little more on a judgment perspective here. How do you think about who to bring from your management team under the tent in the context of the M&A conversation? When, and in retrospect, was it too early, too late? Obviously, in a public company context, it can be even far more tricky. I'd love to hear the perspectives from each of you on that. Yeah, so for us, obviously, when we were a private company, we could really fence post in the discussions. What someone told me, and I can never validate this, maybe Neeraj can, is that a lot of people say, actually, the leaks happen at the board level. Because what happens is that the partners obviously share, hey, this is what's going on with this company, with their partnership, and then there's more and more degrees of people who find out that news. But that being aside, we really tried to fence post the discussions, and in general, we were pretty good at keeping things pretty quiet. Obviously, it's really a function of diligence. So one of the things that I was very particular on is someone made me an offer, or made the company an offer, they'd immediately have this laundry list of things that they wanna talk about, and I would push back very hard and say, hold on, there's some basic things that we need to just make sure we're in the same zip code before we're gonna invest a lot of time. We're a small team with limited bandwidth. We don't have to, we can't go through a proctology exam without impacting the business. And so we need to kind of define some basic parameters of are we in the same zip code before we're gonna invest the time. And experienced suppliers understand this. Sometimes they wanna be jerks. They're gonna try and play games with you, but I would highly encourage you to get agreement and alignment on, are they even in the same zip code? And then when we went public, obviously, at one level, there's a lot more transparency. The acquirer has a lot more information. But another level, they still have their own diligence to do, and so once we felt like this was something that was gonna happen, more and more of the management team had to get involved in the diligence process. And so after the fact, someone joked to me and said, it was pretty interesting to come to work one day when the entire management team was not in their office. And it was supposedly some offsite meeting. And so people started wondering what was going on. And the problem is that you have to get your head of HR involved because now people, the acquirer wants to understand who these employers are because you rate and rank all these employees. They see their investing schedules. They see what roles they have. So they wanna really understand, at a nitty-gritty level, who do they wanna keep, who's expendable, or who do they have to offer inducements to based on where they are on their investing schedule. So all that requires more and more people to get involved, and it gets really, really challenging. So I would highly encourage you, if you are in the process, one, obviously, have an advisor who can help you navigate those kind of discussions. And two, grudgingly give up, grudgingly get more and more people involved, only until you've really, really validated that it makes sense to kind of go to the next stage because it's very easy for an acquirer to just soak you, potential acquirer to soak you with information, basically get all the information they had and then disappear because, you know what, they may have been talking to a competitor and comparing you against your competitor. Yeah, and the, oh, sorry, sorry. The, you know, when we got acquired at the end of last year, we were a little bit over 200 people. Part of what the acquirers were looking for was clearly the people, right? It was not, they were not just buying an enterprise software product, they were buying a company. And so there's a certain number of people who they need to meet and see and get to know in order to feel comfortable with it. The nature of that process, I mean, there's tactics you can use to include more people without necessarily going and saying to everybody that we're going through a sale process, right? For example, you could say that we have a partnership opportunity or an OEM opportunity, and this is a really important one, we need to do a lot of work in preparation for it. And honestly, a lot of M&A conversations turn into those in reality, right? Well, we're not gonna buy you, but we'd love to resell your product or we'd like, we have a sales team that needs more stuff to sell. And, you know, to the extent that part, you know, the company has a product that you sell to customers, but in some sense, if you're ever gonna exit to a strategic acquirer, the company is also a product and the customer is the acquirer. And through the M&A process, you learn your customer requirements. So you learn about what your customers are looking for and they give you feedback and having the whole team see some of that feedback, like, you know, be more interested in the company if you had these characteristics or you did these things differently is very useful. And for the same reasons, it's useful for the management team to get real customer feedback about the product you're building for your end customer. That's some advantage of getting more people involved in the process and getting them involved earlier. Great, let's take a couple of questions. I'll repeat that question. What are your guys' ideas and opinions on engaging with advisors? What time and when and any kind of words of advice or things that you look for? Is that to me? No, it's not. You can leave this one out. Sure, so I think it depends on context. So when we were a private company and kind of practically approached, I do agree with the comment, the best companies are bought, not sold. And acquirers quickly can figure out, you know, if you're really trying to sell the company versus, you know, you're just running a business and they wanna kind of give you optionality. When we were kind of practically approached, we didn't feel the need to kind of go get acquired because in some ways that's a signal that actually you're taking that interest very seriously. In some ways, you wanna seem interested, but not that interested, right? Because, you know, it's important for them to believe that you're very happy staying at the private company. I think if you're, you know, if you're at a point where it's, you know, you've kind of hammered out the basic framework and you feel like, hey, we need some help because one, you know, you still have a business to run, there's, you know, and there's a lot of work to be done, then it may make sense to bring the acquirer. Obviously, it's a public company. There's a fiduciary responsibility to get, you know, independent valuation and make sure that there's a fairness opinion so that the offer you're getting is actually, quote unquote, fair to all shareholders and so forth. So there's obviously, you know, obligations to do that, but as a private company, you can pick and choose when you want to, you know, have an advisor. Yeah, I would just say the advantage of an advisor getting to know you sooner is that, you know, they become much more than a broker. If they understand the nuance and subtlety of your product and your strategy and what's going on in the market and can explain that bottleneck shifting in the technology space around what's going on and why you have a leadership position and why your business is growing in a secular way and why it has defensible barriers to entry, they can go to the acquirer with a whole synergy narrative laid out, ready to go, and from an acquirer perspective, that opportunity will then bubble up to the top of the list as opposed to, you know, them showing up at the acquirer and saying, hey, we've got this company that is for sale. The acquirer says, well, what do they do? And they're like, we didn't bring the guy who knows that, right, which is a lot better. Yeah, actually, I just want to add to that. That's a great point, and I should have said that earlier on. We invested a lot of time with investment bankers. You know, I met with every investment banker out there. As I think I, in the question that Neeraj asked me about how much do we spend on marketing, we spend very little on marketing, but some of the best marketing investments we made was with the investment bankers because they, by definition, are information brokers. And to Lonnie's point, we articulated, you know, one of our competitors at BladeLogic was Opsware, which, you know, now it's, you know, the A16Z crew, and they're very good at marketing, right? So they would kind of go out there and constantly pummel us and all that, which after a few set of, if there's such an irrelevant company, why did they spend so much time talking about BladeLogic? And so it kind of worked to our advantage, but we still had to kind of clear up a lot of FUD, and we had to explain to them our value prop, how defensible we are, why we're winning, where we're winning, and so forth. And that ended up being a great marketing tool because it kind of educated, you know, a bunch of potential acquirers without us looking like we're outselling the company. So we have a lot of early-stage companies here that are probably, this is a ways away from them thinking about M&A IPO. Are there operational or tactical things that you guys wish you had done earlier that these guys can kind of internalize and think through and say, you know, it could, not the financial example because you don't know who your acquirer's gonna be, but is there anything from a management team perspective, a council, maybe investment bankers earlier, anything like that that early-stage companies should be thinking through? Yeah, I mean, I think a big thing, I think, is in earning trust and credibility. So I think, you know, if you talk a big game about your business, you say, I'm gonna do, say you're doing a million, I'm gonna do 20 million next year, you know, which is a pretty big jump, and you don't come anywhere close, you know, your credibility starts to question. So I would say there's always a tendency to, you know, kind of amplify the story and amplify the value proposition, but I would encourage people to, you know, do what you say and say what you do because over time, that will speak volumes, that this is a credible management team, they don't bullshit me, you know, they're really focused on executing the business. And so as people get to know the company, you know, they obviously, you get their respect. So we spent, you know, we didn't try and like exaggerate our numbers or like inflate where we were in terms of stage. And, you know, in the early days, we were like this, you know, frankly, you know, tiny little company in Boston, you know, and, you know, not many people, the space was kind of, you know, people don't really understand the space, interesting, but as they saw it, they met with us like a year later, ooh, you made a lot of progress, a year again later, ooh, you made a lot of progress, all of a sudden, you know, you start building a momentum. So I think you gotta think about the long game in terms of how you, you know, communicate and communicate your value proposition and your story to potential, you know, other stakeholders. Yeah, two things I would add to Dave's point. One is that you make a lot of technology platform decisions early on, often, and especially in an enterprise software company. And those choices can greatly decrease or increase your acquirability in ways that are independent of like pure, you know, scalability and performance and efficiency concerns. For example, if you build your entire company on csharp.net, there is a world of acquirers who are just unavailable to you, right? And will always be unavailable. And so that's one thing to think through. And another is back what I was talking about earlier on market selection. You know, I think people will often target markets that are large and crowded. And that's just, it's much less acquirable than smaller markets where you can be a dominant vendor. And that market selection thing happens pretty early on in the life of a lot of companies. One more. How much do you guys, or did you think about timing? So there's a point at which you maybe become unacquirable and you lose optionality, you have to go public, right? Is that a cognizant kind of process you went through, thought process you went through, or did you just focus on growth and worry about this stuff later? Yeah, actually, I respectfully disagree with you. I think if you're executing as a business, you're always acquirable. I think it's just a question of whether or not you want to sell. But your attractiveness is directly a function of how your business is performing. And so, you know, even though what was interesting is we got sold and, you know, we got bought in 2008 for probably the highest multiple. I mean, if anyone remembers 2008, people thought the world was coming to an end with the credit crisis. We got acquired for essentially, you know, close to 10 times, you know, revenue, which at that time was a crazy multiple. That was the good old days. And so, in some ways, it was easier for the, and BMC acquired us, and they were not known to be high payers, right? But it was easier for them to acquire us at that stage because we were already a public company, there was already a public valuation, versus, say, buying us at like 300 million as a private company. So it's kind of weird, in some ways, the dynamics that acquirers have to go through in terms of how they get to valuation. And because they could see our track record, they saw our growth rates, they could very quickly extrapolate that, you know, to the point that Lonnie made about uplift to their business. They could quickly see, you know, the synergies that this business could drive. So I don't think it's really a function, I don't think you ever outgrow being acquired. I think it's really a function of, are you really executing your business? Yeah, I would agree with that. I mean, acquirers think about it in terms of multiple of something, revenue or profit. If you're larger and you're losing $4 for every dollar of revenue, and you're selling undifferentiated product in a crowded market, you may be hard to acquire. But if you're generating large amounts of profit and, you know, hitting on all cylinders, even if you're very large. Actually, a lot of these companies generate $10 billion, $15 billion a year in cash, right? They have $30 billion sitting in offshore bank accounts in Switzerland or Ireland, earning a negative 0.5% nominal interest rate. And so, you know, you have a lot of capital going around. And so absolute size, I think, is really a constraint. Great, thank you to both of you. So while I'm disappointed that nobody used the cookies, kittens and crack into any of your answers, I still think it was a good conversation. So thank you. Guys, to me, this has been absolute enterprise heaven. And I hope that you all feel the same way. Networking throughout has looked great. So let's do a quick exercise. Raise your hand if you've met at least two new people. Keep your hands up if you've met at least five new people. How about 10? All right. Right now, thanks to Catalyst and Obika, we have some delicious food that's gonna be served as well as drinks. The bar is gonna open up. So make it your mission now to meet some more people and keep the conversation flowing. I wanna thank all the panelists today. And also, really importantly, can everyone on the battery and workbench teams raise your hand? So look around, guys. For anyone who's ever planned an event, you probably appreciate the work that goes into it. But if you haven't, it takes so much effort and coordination to actually pull this off. So I just wanna thank everyone that's been involved in making today possible. That's a wrap on behalf of Workbench and Battery. It's been so great. And we hope that you stay, mingle, enjoy some good food. Thanks, guys. Thank you, guys.