INSIDE THE IPOCue NerdWallet (NRDS), a website and app that provides financial guidance that today made its stock market debut. It all started 12 years ago when NerdWallet co-founder and CEO Tim Chen received an email from his sister asking him to help her choose a credit card. As he researched the field, he was inundated with promotional and marketing materials, making it near impossible to uncover the best options. Chen took matters into his own hands and built her a spreadsheet, listing the pros and cons of each offer. From there, NerdWallet was born.
“The same problem existed in basically every other financial decision as well,” Chen says, “so I saw an opportunity to really help people with clear, transparent guidance that wasn’t biased. From the outset our mission was to be trustworthy.”
NerdWallet’s commitment to clarity resonated with consumers. From the get-go, the company’s reputation for integrity put it on a strong growth trajectory. In recent years, says Chen, NerdWallet saw even more ways it could expand into new financial decision areas and new markets. He envisioned building on the core business and striking deeper partnerships with like-minded financial services institutions—and that’s when the notion of going public took hold.
He describes his team of self-described Nerds as mighty and passionate. To go forward with his plan, he knew he’d need a CFO with the same kind of drive. Hiring Lauren StClair to serve in that role pretty much sealed the deal, he says. NerdWallet’s finance and accounting functions were already top-notch, but they would have to be built out when going public. StClair, a well-established finance and operations executive, had the kind of focus, dedication and commitment crucial for the hard work ahead.
After evaluating all the options—IPOs, SPACs and direct listings—Chen, StClair and the management team settled on an IPO, given the company’s longstanding solid performance. There were plenty of factors that had them considering the other options, but ultimately the traditional IPO route gave them the best optionality and ability to raise capital. Plus, says Chen, “our story could stand on its own.”
That’s when the work got real. Chen says that initially, the IPO process was as opaque to his company—and just as full of potential pitfalls—as choosing a credit card was for consumers before NerdWallet came along. He adds that the company navigated the complexities thanks in part to an extraordinary network of supportive CEOs and board members.
For her part, StClair says she’s been thrilled to help steer the company as it stayed the course toward the IPO.
“I’ve been super fortunate to be involved in every step of the process,” says StClair. "I’ve taken part in big high-level decisions; I’ve been in the weeds—and I’ve been immersed in everything in between. I had a hand in helping decide if the IPO path was the right choice for the company and its shareholders, and in determining if this was the right time to move forward. I’ve even had a say in what the ticker symbol is going to be.”
StClair says the robust finance and accounting team she inherited was up for any challenge. When she came on board, the group had already upgraded its accounting systems and had begun improving its monthly and quarterly close process.
“Being able to practice quarterly close and earnings activities gave us confidence, knowing our team could hit those deadlines and deliverables,” she says. “We did a step-up audit, too—an interim stage for a private company set to go public. All that helped us speed up our forecasting process.”
StClair says she had the benefit of a highly experienced advisor who knew IPO processes from every perspective available 24/7. Finding one with that kind of expertise is her number-one tip for other companies thinking about going public.
“Having a fully dedicated advisor was hugely beneficial to management,” she says. “Her sole role was to make sure we had all the information—that we felt comfortable making decisions because we understood the trade-offs. She helped me see around corners and communicate across all stakeholders.”
A major milestone on the way to the IPO was making the company’s first confidential filing with the Securities and Exchange Commission—a complicated procedure that is time-sensitive. Chen and StClair then prepared for the next big target: the road show.
“Being confident and succinct in your messaging is critical,” she says. “We spent hours practicing our formal presentation and handling Q&A. Questions came from all over the place on a range of topics. And we took some extra time to meet with a lot of different investors.”
Now the IPO—a landmark for any company—is finally here, and the curtain is coming up. It’s a pivotal moment for the hardworking Nerds who got NerdWallet to this point.
“We’ve communicated to our Nerds that this is a financing event that will help us achieve our mission,” Chen says. “And we should take a moment to celebrate. This IPO means that we’ve reached a certain stage of maturity. We can show our cards—and our unique position—to the world.”
He anticipates a slight culture shift that comes from having more public scrutiny. Still, he feels that the spirit that has helped the company flourish will ensure that everyone on the team keeps their eyes on core values. After all, that’s what has led to the enterprise’s success so far.
“We should take pride in the road that got us to this point,” he says, “but the bulk of our journey lies ahead of us. We still have a lot of wood to chop.”
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