In a candid discussion, Phantom's leadership team pulls back the curtain on their IPO philosophy, revealing a mindset that prioritizes long-term mission over market hype. They explain why building a “generational company” means treating a public offering as just one possible tool in the box, not the ultimate prize.
The IPO as a Tool, Not a Trophy
- "We view going IPO as more of a tool in the toolbox versus an end state... going public or accessing public markets is a tool to help us get to this end state where we're actually bringing crypto mainstream."
- "It can feel at times like going public is a feather in the cap, a thing you should do in crypto to prove your legitimacy... but just because you can go public doesn't necessarily mean you absolutely should make that decision."
- Phantom resists the crypto-native pressure to IPO for validation. The team compares this to the 2010s tech scene where fundraising became a status symbol, distracting founders from their core mission.
- The success of other crypto companies like Circle in the public markets is viewed as a positive signal of investor appetite, but it doesn't rush Phantom’s own timeline or strategy.
The Public-Ready Private Company
- "We do measure ourselves in a lot of the same ways that a public company might in terms of operational maturity, profitability, revenue quality, and business quality."
- Phantom benchmarks its performance against public company standards, using leaders like Coinbase as a blueprint for what resonates with public investors: predictable, diversified revenue streams.
- The focus is on achieving operational maturity as a natural part of their growth, regardless of whether they decide to go public. This internal discipline is a key part of their strategy to build a durable business.
Capital Without the Complexity
- "There's huge operational complexity that gets added into a company once you take that step... For as long as we can avoid those extra burdens and focus all of our attention and resources on building the best business possible, that's what we're going to do."
- Phantom is in the fortunate position of not needing public markets for capital. Like Stripe, they have a strong cap table and can raise funds privately when necessary.
- The team deliberately avoids the significant operational drag—reporting, compliance, and manpower—that comes with being a public company. This allows them to maintain a singular focus on product development and their core mission.
Key Takeaways:
- Mission Over Markets: Phantom will only consider an IPO if it directly serves its primary mission of bringing crypto mainstream. The decision is strategic, not reactive to market trends or a desire for validation.
- Discipline by Default: The company operates with the financial and operational rigor of a public entity, modeling itself after Coinbase, without taking on the regulatory burdens of an actual IPO.
- Complexity is a Cost: Avoiding the operational complexity of a public listing is a competitive advantage, enabling the team to allocate 100% of its resources toward building the business.
For further insights, watch the full discussion here: Link
This episode reveals Phantom's disciplined and strategic philosophy on going public, framing an IPO not as an end goal, but as a calculated tool for achieving generational impact in crypto.
The IPO as a Strategic Tool, Not a Destination
- Phantom CEO Brandon begins by contextualizing the discussion around the IPO market, noting the strong investor appetite for crypto companies signaled by the public market successes of Coinbase and Circle. He firmly positions a potential IPO—the process where a private company first sells shares to the public—not as a final objective but as one of many tools to achieve their core mission.
- Phantom's leadership is focused on building a "generational company" with a lasting impact on mainstream crypto adoption.
- Going public is viewed as a potential mechanism to help achieve this long-term vision, rather than a milestone in itself.
- Brandon, the CEO, provides a strategic, mission-driven perspective, stating, "when we're building the company, we're really thinking about building Phantom into this generational company with generational impact and really play a huge role in bringing crypto mainstream."
Prioritizing Operational Maturity Over Capital Access
- The conversation shifts to the two primary drivers for a company to go public: accessing capital markets and enforcing operational maturity. Phantom's team is in the fortunate position of not needing the former, drawing a parallel to a large, well-capitalized private company like Stripe.
- Their focus is squarely on the latter—achieving the operational rigor of a public company internally.
- They use Coinbase as a key benchmark, studying its emphasis on revenue predictability and diversified income streams to measure their own business quality.
- Strategic Insight: This focus on internal maturity over external capital signals a healthy, self-sustaining business model, a crucial indicator for investors evaluating long-term viability.
The Hidden Costs and Burdens of Going Public
- Brandon highlights the significant, often overlooked, downsides of becoming a public company. He stresses that the decision involves a strategic trade-off between accessing public markets and maintaining focus on core business development.
- Going public introduces immense operational complexity, including stringent reporting, compliance, and manpower requirements.
- Phantom's leadership consciously chooses to avoid these burdens for as long as possible to dedicate all resources to building the best possible product and business.
- Brandon's pragmatic view underscores a disciplined approach: "I think for as long as we can not necessarily take on those extra burdens and focus all of our attention and resources into building the best business possible. I think that's what we're going to do."
Resisting the "IPO as a Status Symbol" Narrative
- Interviewer Jackie raises the point that in the crypto world, an IPO or a SPAC merger—where a private company is acquired by a publicly-traded shell company—is often seen as a "feather in the cap" to prove legitimacy. The Phantom team strongly refutes this mindset.
- A colleague of Brandon's compares this perception to the 2010s tech culture where fundraising was mistakenly celebrated as the achievement, rather than the fuel for the actual mission.
- He argues that milestones like fundraising or an IPO are merely resources, not the point. The true focus remains on the mission and the product being built.
- Investor Takeaway: This perspective reveals a leadership team that is resistant to market hype and vanity metrics, prioritizing fundamental value creation over external validation.
Conclusion
- Phantom’s leadership views an IPO with disciplined patience, prioritizing long-term business fundamentals and operational excellence over short-term market validation. For investors, this signals a mature, mission-driven company focused on sustainable growth, making it a key infrastructure player to watch in the evolving crypto landscape.
