On the morning of Jan. 9, Box CEO and co-founder Aaron Levie posted this not-so-cryptic tweet: “Well that certainly took a while.”
The 29-year-old entrepreneur will be far more quiet for the next two weeks, as he races to brief potential shareholders on the cloud file-sharing and collaboration company’s eagerly awaited IPO. Right now, the offer could price as early as Jan. 22.
Bad timing derailed the company’s initial dreams of going public in mid-2014. Now, Box seeks to raise at least $137.5 million through 12,500,000 shares of Class A common stock on the New York Stock Exchange under the entirely appropriate symbol BOX. The tentative offer price range is a modest $11 to $13. That values the 10-year-old company at substantially less than the $2.4 billion number bandied about after Box’s last private equity round.
Here’s part of Levie’s core pitch, from its more than 230-page prospectus:
At an organizational level, as people become more mobile and networked, the linear, process-centric ways of working that dominated the mainframe and PC eras of technology are neither tenable nor warranted. Mission-critical workflows should be as simple as sharing an update on Facebook, whether it’s Pearson’s editors collaborating on new educational content around the globe; Wasserman Media Group sharing content seamlessly and efficiently with their key client and media partners; or Eli Lilly delivering up-to-date information to its distributed teams.
Yes, they’re all customers, as is more than 48% of the Fortune 500. Some of its biggest accounts: Molson Coors (TAP), Chevron (CVX), New Balance, Schneider Electric (SU), Dell, eBay (EBAY), Safeway (SWY), and Eli Lilly (LLY). For the nine months ended Oct. 31, 2014, the company counted more than 32 million registered users. Revenue for the period was $153.8 million, up 80% from the previous year. But the company is still burning an enormous amount of money on sales and marketing, $152.3 million for the same period. And about 50% of the proceeds from the IPO will go toward—you guessed it—more investments in that activity, as well as product development and administrative processes.
Soon, we’ll see if the public market “buys” Box’s mantra of empowerment for information workers. Meanwhile, here are five metrics that I hear discussed less often:
1.) Long legacy of losses. Box doesn’t expect to be profitable for the “foreseeable future.” As of Oct. 31, it had accumulated a deficit of $482.7 million. And, no, I don’t think this is surprising, either.
2.) New order growth is healthy. During the same period referenced above, at least 60% of the software company’s new orders were for new enterprise customers (defined as companies with more than 1,000 employees) or for additional services within existing accounts. The latter is where the company model starts to pay off over the long-term; sales and marketing expenses are dramatically lower for renewals.
3.) You’ll need a crash course in customer retention rates. Billings are a key performance metric for cloud software companies, since they reflect the multi-year nature of many corporate subscriptions. For the nine months ended Oct. 31, Box reported billings grew $164.4 million, compared with $112.7 million in the year-earlier period. Box also touts its customer retention rate, which it estimates at 130%. It reflects not just renewals, but upsells of more services. It calculates retention using contracts worth at least $5,000. “We believe our retention rate is an important metric that provides insight into the long-term value of our subscription agreements and our ability to retain and grow revenue from our customer base,” the company notes.
4.) It’s fighting an 18-month-old patent dispute. OpenText, which describes itself as Canada’s largest software company, filed suit against Box in mid-June 2013. Although the scope of its claims were reduced, the case is still active.
5.) Class A shareholders won’t have much say. That’s because 98% of the voting power remains concentrated in the hands of the company’s Class B investors, including the executive team, employees and directors. (Each Class B share gets 10 votes to one for each Class A.) “This will limit your ability to influence important transactions, including a change in control,” the prospectus explains.
This item first appeared in the Jan. 12 edition of Data Sheet, Fortune’s daily newsletter on the business of technology. Sign up here.
Learn more about the success of IPOs in 2014 from Fortune’s video team: