A little more than a year ago, Dan Springer was a stay-at-home dad. Today he is the CEO of a freshly minted public company now valued at close to $6 billion.
Springer joined the digital signature company DocuSign in January 2017 after taking close to four years off. Now with one of his sons in college and the other set to start this fall, Springer is in New York ringing the Nasdaq opening bell 15 months into his tenure as the chief executive of DocuSign.
“The best career decision I ever made was to spend those four years as a single dad focused on my sons,” Springer said in an interview with GeekWire Friday. “Coming back was the second best decision I ever made because I realized it’s what I enjoy doing. For myself what I missed professionally was the opportunity to help people build their careers. ”
DocuSign originally gave a stock price range of $24 to $26, then later raised it to $26 to $28. The company priced its stock at $29 and it opened even higher today at $38. At the close of its first day as a public company, DocuSign stock sat at $39.73, a 37 percent increase from its original offering price.
DocuSign sold 21.7 million shares of stock in its IPO for a total of more than $629 million — though the company received no proceeds from approximately 5.6 million shares sold by existing stockholders at a value of approximately $162 million.
This isn’t Springer’s first roadshow rodeo, a gauntlet of meetings with investors across the country to tell the company’s story. The Harvard MBA was at the helm of Responsys, a maker of cloud-based marketing software, when it went public in 2011 and later sold to Oracle in 2013.
Springer’s most important lesson from the IPO process? “If you’re going to be a CEO of a company going public, have a CFO who has done it before and is highly competent. Your life will be much easier and happier.”
In Michael Sheridan he has that. He spent a year as CFO at Facebook, and he was the CFO of cybersecurity FireEye when it went public in 2013.
Sheridan joined DocuSign about three years ago, and even then the board was talking seriously about an IPO. The earnest work to go public began about a year ago. Between then and now, the company has been preparing internally to handle the IPO process and make sure it’s not a distraction, Sheridan said.
DocuSign has expanded beyond its early work in digital signatures into a range of electronic contract and business technologies. Sheridan said the IPO has been a success so far because the company has been patient, embarking on initiatives like international expansion, working with larger enterprises and improving balance sheets. The company went public having accomplished those goals rather than just aspiring to get there.
“Moving all those pieces of the business model from aspirational to proof points and validation of the message where you can go and visit with investors and show them the success that you’re having in all those critical drivers,” Sheridan said of the lessons he learned from taking a company public in the past. “That makes for a process that goes really well.”
DocuSign was founded in 2003 by Tom Gonser, Court Lorenzini, and Eric Ranft. Gonser remains on the board of DocuSign and still holds a small stake in the company, but now works as a venture capitalist at Seven Peaks Ventures in Bend, Ore.
Today, the company employs 2,200 people across 13 offices. DocuSign originally started in Seattle and later relocated its headquarters to the San Francisco Bay Area. However, its Seattle office at the 999 Third Avenue tower remains its largest, with approximately 850 people.
For the year ending Jan. 31, 2018, DocuSign reported $518.5 million in revenue, an increase of 36 percent over the prior year. The company cut its net loss in that period from $115.4 million to $52.3 million. When asked about those figures, Sheridan said the company has drastically narrowed operating margin losses while becoming profitable in terms of free cash flow.
“It’s hard to imagine making more progress than we have in the last two years toward those goals,” Sheridan said.
Going forward, Springer says to expect more of the same from DocuSign. It will continue to grow. The company also plans to use some of its new cash stockpile from the IPO to make acquisitions similar to a deal last year to bring in much of the talent and tech behind machine learning company Appuri to bolster DocuSign’s innovative capabilities.
DocuSign is one of three Washington state companies to go public this week alone. Joining DocuSign on the public markets Friday was work management software company Smartsheet, which also had a great first day. In its first day as a public company Thursday, Vancouver, Wash.-based semiconductor laser manufacturer nLight saw its stock soar 68 percent.
Springer actually ran into Smartsheet CEO Mark Mader at a roadshow meeting in Chicago. And he worked with nLight CEO Scott Keeney in the Seattle offices of McKinsey & Co.
Springer said these successful IPOs are a “great endorsement” of the tech talent turned out by Seattle-area institutions like the University of Washington and the gravitational pull that companies like Amazon and Microsoft have in terms of luring top talent.
The IPO represents a proud day not just for DocuSign and the Seattle tech scene, but for the investors who have been along for the ride for years. Bellevue, Wash.-based Ignition Partners was one of DocuSign’s earliest investors, and in 2004 it led the company’s first institutional rounds, accounting for $2 million out of the $3.5 million raised. In total, Ignition has invested approximately $16.5 million across four different rounds, and it has a 9.8 percent post-IPO stake in the company.
The connections go beyond investing. Jonathan Roberts, Ignition Partners founder and partner, is good friends with DocuSign co-founder Gonser dating back to when they attended the University of Washington together and they sit on the board together to this day.
Many of the company’s top investors have one name in common: Pete Solvik. As noted by Bloomberg, his firms hold the largest combined stake in the company at 13 percent, an investment that is now worth $665 million.
These investors will surely be celebrating tonight. Each of DocuSign’s offices celebrated the opening bell this morning. Springer said the company will mark this historic moment with a series of DocuSign Impact community service events.
“That’s how we celebrate everything at DocuSign trying to give back to our community,” Springer said.