/Tech6h ago

Kevin Kwok says Cloudflare strategically allocated 5% of its IPO shares to build social capital with potential allies

Qualtrics co-founder Ryan Smith advised Cloudflare on the strategy

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Kevin Kwok
John Coogan#855
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TBPN@tbpn

The smartest thing @eastdakota did before Cloudflare's IPO was offer shares to people who could help the company in the future.

"The most clever thing that we did [for the IPO], and this was advice that I got from Qualtrics Co-Founder Ryan Smith, was he said, 'What are you doing about friends and family?' because you can take 5% of the IPO and allocate it to friends and family. I said we weren't going to do it."

"He said, 'No, you're thinking about it wrong. Think about the people, who if they owed you a favor, could make a meaningful difference in the future of Cloudflare, and then offer them the ability to invest in the IPO.'"

"I said, 'Some people are going to have conflicts.' He said, 'It doesn't matter. Even just the fact you offered it, even if they can't do it, they'll always remember that super fondly.'"

3:03 PM · Jun 10, 2026 · 36.1K Views
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Kevin Kwok@kevinakwok

This is very true--and not just of IPO. In all rounds the period between lead picked and round closed/announced it's free social capital to get introd to anyone

Most founders don't fully take advantage of bc they are exhausted by this point in process. Which is reasonable too

TBPN@tbpn

The smartest thing @eastdakota did before Cloudflare's IPO was offer shares to people who could help the company in the future.

"The most clever thing that we did [for the IPO], and this was advice that I got from Qualtrics Co-Founder Ryan Smith, was he said, 'What are you doing about friends and family?' because you can take 5% of the IPO and allocate it to friends and family. I said we weren't going to do it."

"He said, 'No, you're thinking about it wrong. Think about the people, who if they owed you a favor, could make a meaningful difference in the future of Cloudflare, and then offer them the ability to invest in the IPO.'"

"I said, 'Some people are going to have conflicts.' He said, 'It doesn't matter. Even just the fact you offered it, even if they can't do it, they'll always remember that super fondly.'"

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