Snap’s much-anticipated IPO has generated a great deal of enthusiasm in the tech and financial communities, as well as here in Los Angeles, the company’s home town. And, for good reason. It is one of the largest tech IPOs in recent memory, and the company is one of the only viable challengers to Facebook’s social media dominance. Indeed, it is the largest U.S. tech IPO since Facebook’s. But with that status come challenges. Now that Snap is a public company, not only will it have to live up to its valuation, but it will also have to continue to drive user growth, engagement, and revenue.

After two days of trading, Snap Inc. now sits at $27 a share, up 59 percent from its $17 IPO price on Thursday morning, with a market cap of more than $31 billion. With the debate on Wall Street officially underway, investors must decide where they sit on the bull and bear sides of this equation. Just this week, Atlantic Equities research analyst James Cordwell downgraded Snap to “neutral”, citing facts like Snap’s average revenue per user is less than 15 percent of Facebook’s, and that the limited amount of user data Snapchat has compared with Facebook could restrict its potential among direct-response advertisers.

As a social media messaging app reliant upon capturing an increasing percentage of advertising budgets for growth, Snap could face some inherent barriers going forward, particularly if it has hopes of competing with the likes of Facebook or Google for a portion of those advertising dollars.

Commentators will point to TV ad budgets as being squarely in Snap’s crosshairs as it hunts for more revenue. This angle is spurred by Snap’s recent S-1 filing, where it played up comparisons between the premium ad experience happening on TV screens with its own mobile sized, vertical video ads. “We wanted to figure out how to capture the entertainment and creativity of television advertisements,” Snap said. From there, the company went on to explain why its ads are actually superior to TV, and why the $70 billion in TV ad revenue, just in the U.S., is ripe for the taking.

However, this focus on TV ad budgets, and the expensive, large scale branding campaigns that come with them, ignores a key difference between Snap and Facebook (and Google), which is Snap’s lack of performance-based advertisers.

Performance-based advertisers provide a steady source of revenue, thanks to the millions of buyers looking for simple, trackable ROI at a low price. In September of 2016, Facebook announced it had 4 million advertisers using the platform, the majority of which consisted of small and medium-sized businesses. At the time, Facebook’s Sheryl Sandberg noted, “We’ve worked hard to make our ads very easy to use, very simple, low cost and high ROI.”

While Snap currently has many of the top brand advertisers signed up, hoping to stay relevant to a younger demographic that is watching less TV, many of those dollars are still experimental test budgets, with agencies continuing to ask for improved analytics and provable ROI to justify those spends. This means revenue could be bumpy, subject to fluctuating brand budgets and the agencies that often dole them out. To be a Google or a Facebook, Snap needs to figure out the self-service, programmatic, data-driven side of performance advertising — not just brand and influencer reach campaigns.

And, although Snap can point to its ads API launch late last year as solid evidence of progress toward a more programmatic approach, the recent departure of Sriram Krishnan from its executive ranks comes at a less than ideal time. Krishnan, who had previously led Facebook’s Audience Network and other advertising products, was brought on as Snap’s head of monetization. So for now, amidst the soaring news of the IPO’s success, investors paying close enough attention will have to just wait and see.

Erik Rannala is cofounder and managing partner of Mucker Capital.