Evan Spiegel, the co-founder and CEO of Snap Inc., met with potential investors in New York City last week as the company starts to mobilize backers for its highly anticipated initial public offering, according to people with knowledge of the matter.
Snap, the Los Angeles-based parent company of the picture-messaging app Snapchat, filed confidential paperwork last fall for an IPO, setting the wheels in motion for what's likely to be the largest tech debut in years.
It's still expected to list its shares in late March at a value of between $20 billion and $25 billion. No decision has been made on which exchange Snap will list its shares on, sources said.
Snap was able to file confidentially with the Securities and Exchange Commission because it has annual revenue of under $1 billion. It can't hold formal meetings -- the official IPO "roadshow" -- with investors until 21 days after its financial statements are made publicly available. To meet a late-March-debut goal, Snap has until mid-February to make its paperwork public.
But Spiegel and his team have visited potential investors for "educational" meetings -- in other words, to introduce them to the technology and sell Spiegel's vision for the future of the company. Those meetings brought him to New York last week, the people who spoke with Business Insider said. The Wall Street Journal reported last month that Snap executives have held the meetings in several cities around the U.S.
The company's 26-year-old CEO is leaving the nuts and bolts of the deal process to his chief financial officer, Drew Vollero, the former Mattel executive who joined the company in 2015, and his chief strategy officer, Imran Khan, the former Credit Suisse investment banker known for helping take Alibaba and several other tech companies public.
Spiegel will, however, be the focus of the message that management conveys to investors, three people said. He will be framed as a visionary, similar to how Facebook CEO Mark Zuckerberg was depicted before that company's flotation.
"Evan is the visionary -- Evan is the story," one person told Business Insider.
Snap lieutenants are also scheduled to meet with stock analysts next week, according to a report earlier this week by Axios' Dan Primack. These meetings are meant to help the analysts refine their financial models -- again, ahead of the release of official financial statements -- and the documents could be public soon after.
The precise timing of the release of the financial statements, in what's called an S-1 filing, and of the entire IPO is subject to change, of course. The timeline could be delayed if Snap faces questions from the SEC over its disclosures, if investor sentiment toward stocks sours substantially, or if early feedback from the investor meetings is somehow lackluster.
Snap declined to comment.
For months Snap's IPO has been a foregone conclusion on Wall Street and in Silicon Valley. The company last year added a seasoned IPO specialist to its board and then changed its name from Snapchat to Snap in a move that it said was meant to speak to potential public investors.
"You can search Snapchat or Spectacles for the fun stuff and leave Snap Inc. for the Wall Street crowd :)" the company said in a blog post in September.
The company's business is quickly evolving from the chat app that gave it its name. The company has increased advertising and added news, and last year it began selling its Spectacles, eyeglasses that can take photos and record video.
On Thursday the Snapchat app was updated to make it easier to use and less confusing for the general public.
Still, with Snap potentially valued at as much as $25 billion, the company will need to explain what its total addressable market can be -- outside of the millennial demographic it's already popular with. Snap said in June that it had 150 million daily users. But Instagram, the rival photo app owned by Facebook, has already reached the same number of daily users since launching a Snapchat-like service, dubbed "Stories," in August.
Snap will also have to lay out a vision for how revenue can grow from less than $1 billion to many billions. And the angle Snap chooses in pitching itself to Wall Street will be important. The company's recent foray into hardware and its new identity as a "camera company" could cause investors to value it differently than a pure-play internet company, where profit margins are typically higher.
Snap also faces two lawsuits filed since news of its IPO plans broke last year, including one from a former employee who is accusing the company of lying to investors about its growth metrics. Snap said it thinks the suit has no merit.