• Affirm, a buy-now, pay-later fintech company, went public on the Nasdaq in January 2021.
  • Max Levchin, Affirm’s CEO and a PayPal alum, shares advice for founders considering going public.
  • This article is part of “Road to IPO,” a series exploring the public-offering process from prelaunch to postlaunch.

Max Levchin, the founder and CEO of Affirm, always knew he would take his buy-now, pay-later fintech public. What he didn’t know was the pandemic, one of the most economically uncertain times in history, would set Affirm’s initial public offering into motion.

“We definitely experienced a real moment where we’re not yet profitable. We would need to raise money if we wanted to survive through what could be a drought in equity capital markets,” Levchin said, referring to the first several months of the pandemic.

As a buffer, Affirm raised private capital in mid-2020, a process Levchin said was “a huge pain” with “a ton of uncertainty.”

It might seem like curious timing to take your company public during a pandemic, but that’s exactly what Max Levchin did.

As a buy-now, pay-later company, Affirm’s business model was built on the promise of repayment as it enabled consumers to finance their online purchases. The pandemic became a boon for Affirm as Americans received stimulus checks and e-commerce boomed. Levchin, wanting to ride that wave, needed more capital to grow the company. The sustained unpredictability in the private markets triggered talks of going public, but Levchin wanted to make sure that doing so was a step in the journey and not an end point.

He had his doubts. “Can we head from the IPO into, ‘Go faster and harder and invest even more aggressively into interesting ideas,’ or would we just suddenly stall and become a slow-moving, publicly traded sort of paralyzed giant?” Levchin said. Affirm shares were listed on January 13, 2021.

As the pipeline of IPOs starts to build up again, including the anticipated debut of Affirm’s buy-now, pay-later rival Klarna, Business Insider spoke with Levchin about Affirm’s IPO. He reflected on the decision-making process leading up to the offering, how he’d handled the peaks and valleys of Affirm’s share price, and a couple of pieces of advice for founders contemplating going public.

From late nights on Zoom to Nasdaq debut

As a cofounder of the payment juggernaut PayPal, Levchin experienced firsthand the benefits of taking a fintech public.

The process was still “significantly more work than I thought it would be,” Levchin said. It wasn’t uncommon for Levchin to be on Zoom with his CFO and chief legal officer at 10 p.m. with half-finished glasses of wine, jokingly asking why they did this to themselves, he said.

In the second half of 2020, long days and late nights were spent auditing and cleaning Affirm’s books, getting numbers and documents in order. Affirm’s small IPO task force also needed to assemble critical documents, including the company’s S-1 and a founders’ letter. Meanwhile, its chief legal and finance officers needed to vet a long list of bankers who jockeyed to represent Affirm during the frothy, low-interest-rate market at the time.

Affirm landed on three banks as the lead underwriters for the offering. Beyond having long-standing relationships with the companies pre-IPO, Levchin wanted partners who could “speak to our business at least as well as we could,” he said.

The hard work seemed to pay off. When Affirm debuted on the Nasdaq, its share price surged as much as 110% above its opening price of $49. Affirm shares climbed to as high as $164.23 in late 2021 but suffered the same stock rout that battered tech companies throughout 2022 and 2023.

A major adjustment to being a public company, Levchin said, is not falling into a “quarterly lifestyle” where milestones, product road maps, and key metrics are divided into four-month sprints.

“You have to have this duality of mind, where being public is about the quarter, but it can’t be just about the quarter,” Levchin said, referring to the ups and downs of running a public company. If a quarter results in a number you’re not proud of, “you can’t just hammer yourself over the head with it,” Levchin added.

“It’s going to get worse if this quarter isn’t pretty, but you know you’re doing the right thing, and you can see in numbers that it’s going to be OK. Don’t stress it, and it’ll work itself out,” he said.

Words of advice

For founders considering going public, Levchin offered some advice.

It’s not uncommon to see startups hiring executives such as a president or CFO in anticipation of going public. But that could actually be a sign that you’re not ready, Levchin said.

Chemistry is critical to ensuring the IPO team is on the same page regarding what’s right and wrong for the business. That’s not something that can be “formed and seasoned over the course of an IPO prep,” Levchin said.

Levchin also warned against letting the process “consume the company.” He kept the team working on Affirm’s plans very small because he wanted the day-to-day engine to continue humming along during the intense period.

Since Affirm’s CFO and chief legal officer largely spearheaded the IPO process, Levchin said he was left to focus on the company’s short- and long-term plans for the capital.

“If you don’t deliberately plan for that, you may run the risk of just freezing in place,” he said.

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