The listing, which took in $83.3 million it its debut but also mostly underperformed its expectations, was still a welcome event for Sonos co-founder Craig Shelburne, a former associate at Wilson Sonsini Goodrich & Rosati and Akin Gump Strauss Hauer & Feld.
Shelburne, who also serves as the company’s general counsel, co-founded Sonos in 2002 along with Thomas Cullen, John MacFarlane and Trung Mai, all former colleagues at Software.com and Openwave Systems Inc. Prior to joining Software.com, MacFarlane’s software online retailer business, as its general counsel in 1998, Shelburne spent four years in Big Law. After earning his law degree in 1994 from the University of California, Los Angeles, Shelburne spent two years as an associate at Akin Gump and two more years working in the same role at Wilson Sonsini.
During an interview with the Santa Barbara Independent in 2015, Shelburne explained that Software.com merged with Phone.com in 2000 to form Openwave. Shortly thereafter, both Shelburne and MacFarlane left the combined company. Nonetheless, their collective experience at the height of the dotcom bubble inspired the two to work together again after MacFarlane shared with Shelburne his idea for a digital music stereo.
In January 2017, MacFarlane resigned as CEO of Sonos after 14 years leading the Santa Barbara-based company. Patrick Spence, who had served as Sonos’ president and chief commercial officer, replaced him as CEO. Mai, who joined Sonos as vice president of operations in 2003, retired in early 2015. Besides Shelburne, who records on file with The State Bar of California show is no longer eligible to practice law in California, only Cullen, who serves as Sonos’ vice president of market development, remains at the company.
Under Spence’s leadership, Sonos announced in early July that it would go public. The company’s stock began trading last week on the Nasdaq under the ticker symbol “SONO.”
Securities filings show that Sonos had a net loss of $14.2 million on revenue of $992.5 million for fiscal 2017, a 10 percent increase in revenue from the year prior. Sonos’ S-1 also divulged the legal fees and expenses for Fenwick & West, which on Monday lost top technology transactions partner R. Gregory Roussel to Latham & Watkins.
The Fenwick & West lawyers that advised on Sonos’ IPO include Jeffrey Vetter, co-chair of the firm’s securities and corporate finance practice, corporate partner William Hughes and associates Kyle Canchola, Allison Cooper, Niki Fang, Ari Haber, Thomas Kang and Lisa Richards. Fenwick & West executive compensation and employee benefits partner Shawn Lampron and associate Hans Andersson also worked on the matter.
Kevin Kennedy, a veteran capital markets partner at Simpson Thacher & Bartlett in Palo Alto, took the lead for Sonos’ underwriters on the IPO, a group led by The Goldman Sachs Group Inc. and Morgan Stanley & Co.
Sonos closed trading Monday with 15,972,221 shares of common stock trading at about $19 per share, a sum that gives the company a market capitalization of nearly $1.9 billion. Sonos, which has taken a somewhat different approach to the way it deals with its intellectual property, competes with other technology giants selling speakers, such as the Amazon Echo, Apple HomePod and Google Home.