PALM DESERT, Calif.— With nearly 2,000 employees and tens of thousands of customers across the globe, DocuSign certainly could be on the short list of potential IPO candidates.
But don’t look for the electronic signature powerhouse, which employs about 775 people in Seattle, to hit the public markets anytime soon.
In an interview with GeekWire at the EY Strategic Growth Forum, Krach said that he’s in no hurry to take DocuSign public, even though it would likely be one of the biggest enterprise software-as-a-service companies to reach the public markets.
“It’s like I’ve said before: It is a land grab,” Krach told GeekWire. “And, I know when you do an IPO you are on the 90-day shot clock.”
Krach said an IPO could serve as a distraction for employees and management, amid a critical time in DocuSign’s meteoric growth.
Furthermore, he said DocuSign is not hurting for cash, with about $200 million in the bank and huge strategic investors such as Microsoft, Google, SAP, FedEx, Samsung and Comcast standing firm behind it.
In the case of many of those investors, Krach said that they’ve been able to trade equity as a private company to get inside those large partners, a strategy that has led to huge customer deployments.
“It opened the door,” said Krach, adding that the management team has been running DocuSign like it was a public company for the past two years, even hosting quarterly conference calls with investors.
That way, when the company does go public “it is not a shock to the system,” he said.
Even so, the long-time tech executive doesn’t see why you’d rush to an IPO.
If you asked 100 CEOs if they went public too early, a lot of hands would be raised, he said.
“If you have enough capital and you are really going after this thing, what’s the rush?”
Even if the company were ready to test the IPO waters, Krach said that it would be tough to do so as the company looks to fill his shoes as CEO.
In October 2015, Krach announced his intentions to transition to the full-time chairman role of DocuSign, but the board has yet to find the right match.
In fact, one candidate who had initially accepted the job backed out at the last minute eight months ago.
Krach said that they are still actively looking for his replacement. But, there again, the company is not in a big rush, and Krach said he’s pledged to stay actively engaged in DocuSign for at least three years following the new CEO appointment.
More importantly, Krach — who previously co-founded Ariba— said they want to find the right fit. And they are spending the time to find the person who meets all of the key criteria — someone with competitive fire, product expertise, operated a business at scale and who knows how to manage a company experiencing hyper-growth.
“It’s rarefied air,” said Krach.
At 59, Krach said he still very much loves the opportunity in front of DocuSign, but he firmly believes that new blood would accelerate the business even further.
“This is the biggest market I have ever seen,” said Krach. “And I look at it as winner take all, so to speak. So, how do you win in that environment? The way I look at it, it is a marathon … and you don’t have to sprint the entire way. And the only way I know of doing that is a relay race, and relay races are won and lost in the baton pass, and that’s why this is really important.”