Cloudflare co-founder Michelle Zatlyn on the company's stock exchange listing today, the unique two-class structure and what's next – TechCrunch

Shares of Cloudflare rose 20% today during its first day of trading on the public market, and opened for trading at $ 18 after it priced its IPO at $ 15 per share yesterday and remained steady through the day. The performance of the nine-year-old company – which delivers cloud-based networking services to businesses – was relatively unremarkable as it goes. That's a good thing, given that "first dolls" from day one often signal that a company has left money on the table. In fact, Cloudflare had originally indicated that the shares would be priced between $ 10 and $ 12 before adjusting the price upward, suggesting that their insurance companies, led by Goldman Sachs, were accurately measuring demand for the offer.

Of course, it was still a very big day for Cloudlfare's 1[ads1],069 employees and especially for Cloudflaere's founders Matthew Prince, CEO, and Michelle Zatlyn, its COO. We spoke to Zatlyn today in the hours after the duo rang the opening bell to inquire about the experience, and how the IPO affects the company going forward. Our chat has been easily edited for length and clarity.

TC: Thank you for making time for us on a busy day.

MZ: Of course! [TechCrunch’s] Battlefield [competition, in which Cloudflare competed in 2011] is such an integral part of our funding history. Thank you for giving us the stage to start our company.

TC: Did you get some sleep last night?

MZ: I was so exhausted that I got a good night's sleep. The whole process has been so incredible, so special. I didn't know what to expect, and it's been a lot better than I thought. There are 150 of our teammates, former employees, family members, board members, champions and other friends here with us [in New York at the NYSE]. We also live stream [our debut] to our offices around the world so that they could share this moment with us.

TC: How are you today? The stock is up 20%. Afterwards, there are always little things about whether a listing is priced correctly, whether there was money left on the table.

MZ: At this point we have raised almost a billion dollars between today and all the money we have raised from venture investors. We have a great team. We are very happy. Markets will respond to how they react, but adding more value than we catch is part of our DNA. We believe it is the way to build a lasting company.

TC: You have a floating currency now. Do you envision that Cloudflare can become more acquisitive as a public company?

MZ: We made some acquisitions on the smaller side, and of course we have a team that always looks at different opportunities. But we are really engineering-driven, and we believe we have many products and services left to build, so we will continue to invest in our products and in R&D as well as in our customer relationships.

TC: Retaining employees is a challenge that some recent public companies worry about. How will you address this over the coming days and months as the lockout period expires?

MZ: I'm so proud of where we are today and our entire team, and we're just getting started. [Matthew and I will] shows up Monday morning and comes back to work, and so do our employees, because they want to create the company [an even greater business].

TC: The company went public with a dual-class structure that provides management only, but all employees 10 times the voting rights to the shares sold to the public. Why was this structure important to Cloudflare and gave it pause to investors?

MZ: There are more than 1000 people around the world building the product and working with customers, and we think it's important for them to have the 10: 1 structure, so that's something we got in place for some years ago with encouragement from some of our former investors.

TC: Did you model this for another company? Is there any precedent for that?

MZ: I don't know about another – it could be – but we weren't inspired by another company. We just felt passionate that this was the right corporate structure and [I don’t think it was harder for us to tell the story of Cloudflare because of it]. Over the past two weeks, in conversations with investors around the world, it wasn't among the top 10 topics that came up, so I think we did a good job of describing it in our S-1.

TC: How was the roadshow? What surprised you the most?

MZ: Don't get me wrong, there's a ton of work involved from all kinds of people, in finance, legal teams … But roadshows have a bad rap that people think they're overwhelming and that you eventually will be worn out. That was my expectation. But it was a lot of fun. It was a great privilege to represent Cloudflare to all these investors who were incredibly smart and well prepared. We traveled everywhere, and people told us that you look better than most teams.

MZ: You have the usual suspects; It is a travel show circuit, with some variations based on people's vacation plans, but New York, San Francisco, Boston, Chicago, Baltimore are common, Kansas City, Indianapolis, Toronto. You personally go somewhere and others call people in. But it all gave me new insights into these pools of venture capital. It was very interesting.

TC: In a recent amendment to its S-1, Cloudflare said it was in contact with the US Treasury's Office for Foreign Assets in May after determining that the products were used by individuals and entities that have been blacklisted of the United States. Does this new disclosure slow anything?

MZ: It had no effect. Your group of advisors expands as you go through a public offering, and attorneys dot each & # 39; I & # 39; and cross every one and you become a better company for it.

We provide cyber security solutions that are widely available to businesses, entrepreneurs and nonprofit organizations, and that is incredible, but there are also some nonsensical players on the web, and we have always been a transparent organization [about having to grapple with this].

TC: How will Cloudflare handle embargoed and limited service requests in the future? As a public company, does that process change in any way?

MZ: We have a very good process today. I think people think we let someone use Cloudflare, and that's it. But if customers break the law, we remove them from our network and it's not new and we publish transparency reports on it.

Sometimes, [you’re confronting] things that are not illegal, but they are gross, and the question is whose job is to take it offline. But I work with some of the smartest thoughts on this, and we try to be very transparent about how we figure this out. The conversation is so much better than it was a few years ago, with policy makers and academics and the business community getting involved. People around the world talk about where to draw the lines, but these are difficult, violent conversations.

TC: They certainly put Cloudflare in a precarious place sometimes, as when the company banned 8chan internet forum earlier this year after it became known that the site was being used by a shooter to post an anti-immigration rate. Can we expect Cloudflare to continue to make decisions like this on a case-by-case basis?

MZ: Freedom of speech is such a fundamental part of this nation. Citizens should want legislators to decide what the law should be, and if legislators could do it, it would be much better. On the other hand, these are new problems that arise, so we should not rush. Many opinions need to be weighed and conversations are much longer than they once were, but there is still work to be done, and Cloudflare is one [participant] in a much broader conversation.