There are thousands of Internet entrepreneurs who would like to be wearing Phillip Merrick's shoes. Merrick's company, WebMethods, which makes software that facilitates business-to-business e-commerce, launched its initial public offering on Feb. 11, going out at $35 a share. Weeks later, the Fairfax, Va.-based company's stock price shot up to over $300, and the company, which had revenues of $15 million in 1999, at one point had a market capitalization somewhere in the $9 billion range. In March its stock price was trading in the low $230s.

The price has since fallen, along with the price of just about everything Nasdaq-related, but WebMethods still represents a financial triumph-at least until Wall Street takes another tumble.

So how did President and CEO Merrick and his 275 employees, all paper-based millionaires post-IPO, celebrate? The heady festivities included clearing out cubes at the company's new headquarters to host a modest, catered party for employees and their families as well as Merrick springing for vanity plates bearing the company's stock symbol, WEBM, for his 5-year-old Honda Accord.

Hang on a dotcom second. If you believe all the hype, this kind of moderation isn't part of the post-IPO era. Among other benefits, a high-flying IPO is supposed to yield instant wealth, showering everyone from top-ranked management to the lowest-level employee with enough options to buy new vacation homes or fancy cars, and maybe even allow them to retire early or fund their own Internet startup. The American dream of the digital age may be coming true for a growing number of high-tech workers, but the truth is that most post-IPO companies, even the stars like WebMethods, are far from a cushy sanctum for the rich and famous. Rather, with the added scrutiny of Wall Street and investors on financial performance each quarter, post-IPO life is often the same frenetic, nose-to-the-grindstone environment that it was before going public. And post-IPO, there's more pressure than ever on top management-from the CEO to the CIO-to foster a culture that keeps employees focused on the company's long-term strategic goals and vision instead of the short-term impact of stock price fluctuations on individual portfolios. "The tone has to be set by the executive staff that this isn't important-that you're working as hard as you were before, if not harder," notes Ted Schlein, a general partner at Kleiner, Perkins, Caufield & Byers, a venture capital firm in Menlo Park, Calif., that has recently funded such dotcom players as used-car marketplace AutoTrader.com and the Web search tool Google. "People think of the IPO as glamorous, but more than anything it's a milestone-a marketing event in today's world. It's up to the executive team to minimize its impact on how the company operates on a daily basis."

WebMethods' Merrick is all too aware of that responsibility. That's why he's made it a top priority among his executives, including his technologists, to set the tone for moderation and prepare employees for life as a public company. "I have to make sure that everyone understands we have little control over the stock price on a daily basis, but a lot of control over the long term, and that's completely tied up in how we execute," says Merrick. "After the IPO, a companywide e-mail went out listing the top IPOs of all time, and we were on that list. But as someone pointed out, of those 10 companies, eight were currently trading below their first-day closing price." The message, Merrick says, is clear: WebMethods has no interest in becoming part of that group.Only time will tell if WebMethods will make the cut. More than 50 per cent of technology companies trade below their IPO price within two years of going public, according to Alec Ellison, a managing director at Broadview International, a mergers and acquisition investment bank headquartered in Fort Lee, N.J. "The IPO is not an end; it's a second startup," Ellison says. "Companies need to continue building the company and organisation going forward." That message carries even greater weight given Wall Street's recent moodiness.

Obviously, CIOs are instrumental in that mission. With many of the newly public companies focused on e-commerce, the post-IPO cash infusion is often used to acquire companies or new technologies that can provide a competitive edge. Technology executives are often one of the principal players helping to decide which companies to acquire or invest in. Access to capital to fund these efforts and deliver on the strategic vision is probably the best news about life post-IPO. WebMethods, for example, raised somewhere on the order of $165 million, and Merrick says that currency will allow it to make acquisitions that would have been extremely difficult to pull off otherwise.

The cash infusion from an IPO also gives technology leaders the flexibility to outsource operational IT functions and assign internal staffers to projects that will help the company deliver a competitive edge-for example, adding personalization and customization capabilities to an e-commerce site or building a multimillion-dollar, integrated ERP and customer relationship management systems.

"The best thing about going public is you get liquidity, which means you can use your stock as a tool to either incentivize employees or acquire companies [or technology]," says Jason McCabe Calacanis, CEO and editor of the Silicon Alley Reporter, a New York City-based publication focusing on Internet companies.

And, of course, you can't totally ignore the financial aspect. A lot of companies that venture into the public market bring some financial reward to pre-IPO employees, and often for post-IPO hires who've been lucky or smart enough to negotiate reasonable terms on their options. While these employees might not make an instant fortune, many are assured of a reasonable profit.

Yet along with the good side of post-IPO existence comes the bad. Publicly traded companies-whether they're at the top of their game or struggling to push their stock price back up to IPO levels and above-have to contend with living under the watchful eye of Wall Street, explaining every move and how it relates to the corporate mission. "Everything is public now-we're scrutinized on a daily basis," says Nathan Schulhof, president and CEO of Audiohighway (www.audiohighway.com), a Web site that delivers free audio, video and entertainment content to consumers. "I get 30 calls from brokers a day when the stock price goes down, telling me what we should be doing. But we've gotten a lot of money to make our dreams come true, so I suppose that's the price you pay."

These so-called suggestions from the investment community can be a real distraction to the core IT mission, according to CIOs in several post-IPO companies. Say Wall Street and investors get fixated on auction technology, for example, because the stocks of players in that arena are on an upswing. Outside pressure from top management to respond to Wall Street's demands means CIOs need to do due diligence and explore the possibilities even if they later determine the technology isn't a fit for the corporate vision. "It's not like investors or the board of directors force something-it's just the general mentality of when the stock isn't performing to try this or try that," notes Bill Weatherwax, Audiohighway's executive director of product development and engineering.

For companies like Audiohighway that are trading below their IPO stock price (referred to as options underwater), there are a number of other challenges, including the issue of hiring and retaining talent, especially hard-to-find IT professionals. With the average lock-in period restricting employees from selling stock from anywhere between six months to one year post-IPO, many companies are finding it difficult to retain employees when competitors are promising a fresh run at a better IPO, and an Internet fortune appears to be perched on every corner.

"It's tough because a lot of this is relatively unprecedented-to have so much stock holdings among employees and so much of compensation packages tied to that as well," notes Ken Andersen, managing editor of VentureWire, a daily e-mail newsletter covering the high-tech and venture capital community published by Technologic Partners in New York City. "You have to stress the importance of when times are good, not to get too caught up in the stock price so that inevitably when times are bad you've created feelings that go beyond the value of the stock."

To do that, company leaders need to foster a community spirit, giving employees a feeling of accomplishment and a sense of teamwork that's unconnected to whether the outside world responds positively or negatively to the stock. "If people If people believe in the mission, and you can make them feel like their contribution is recognised and valued, they're not going to leave," Calacanis says. "Success is defined by the individual-for some, success is having $100 million in the bank; for others, it's going to a job they love."

If you consider today's high standards, most professionals are in search of a dotcom nirvana that encompasses both.