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If it's unlikely that they'll go public, how do the investors hope to get their money (and more) back? I know there are other ways, but I don't have a feel for

If it's unlikely that they'll go public, how do the investors hope to get their money (and more) back? I know there are other ways, but I don't have a feel for which kinds of arrangements would really be likely.

flog 11y ago
Well isn't the game now that their preferences mean they get their guaranteed returns even if an IPO bombs well below the private valuation?
angryasian 11y ago
Out of curiosity, why wouldn't they go public ? Major govt contractors are public, Boeing, Raytheon, Lockheed Martin, etc.
- notacoward 11y ago
  I don't see why they wouldn't, but the OP says this: "Palantir’s next step isn’t likely to be filing for an IPO as founder Alex Karp hasn’t been keen on that idea in the past" After $2.32B in funding it hardly seems likely that the plan is to go another round and then IPO. Why would Karp be any keener on it then than now? That leaves the possibility of no IPO at all . . . hence the question.
  - ryporter 11y ago
    That induction does not hold. Karp hasn't been keen on an IPO for the same reasons why many other private companies have been of late -- because it's easier to focus on growing the company without the ever-increasing overhead of being a public company. That in no way implies (or even suggests) that they never want to IPO. I used to work at Palantir, and I've never heard anything to indicate that they want to remain private forever. Even early on, Karp talked about not wanting to IPO (or sell out) too quickly. His plan was always to aggressively grow Palantir into an incredibly successful (and valuable) company, and only then to exit.
- pluckytree 11y ago
  You give up some control of the company or enough control that shareholders own a majority stake, which is likely the case with the companies you mention. You also are subject to a boatload of new regulations and reporting requirements. Going public is a way to raise lots of money. It doesn’t really give a company any tangible benefits. Especially recently, companies that have gone public have ended up being valued at less than their last funding round.
bsiemon 11y ago
Previous investors might be able to cash out in following rounds.
- notacoward 11y ago
  Doesn't that basically make it a Ponzi scheme?
  - ryporter 11y ago
    In the same way that a non-dividend paying stock (such as BRK) is a Ponzi Scheme. Furthermore, there is an active secondary market for shares in Palantir. It's obviously far less liquid than the stock of other similarly sized public companies, but it's still an equity investment.

flog 11y ago

Well isn't the game now that their preferences mean they get their guaranteed returns even if an IPO bombs well below the private valuation?

angryasian 11y ago

Out of curiosity, why wouldn't they go public ? Major govt contractors are public, Boeing, Raytheon, Lockheed Martin, etc.

notacoward 11y ago
I don't see why they wouldn't, but the OP says this: "Palantir’s next step isn’t likely to be filing for an IPO as founder Alex Karp hasn’t been keen on that idea in the past" After $2.32B in funding it hardly seems likely that the plan is to go another round and then IPO. Why would Karp be any keener on it then than now? That leaves the possibility of no IPO at all . . . hence the question.
- ryporter 11y ago
  That induction does not hold. Karp hasn't been keen on an IPO for the same reasons why many other private companies have been of late -- because it's easier to focus on growing the company without the ever-increasing overhead of being a public company. That in no way implies (or even suggests) that they never want to IPO. I used to work at Palantir, and I've never heard anything to indicate that they want to remain private forever. Even early on, Karp talked about not wanting to IPO (or sell out) too quickly. His plan was always to aggressively grow Palantir into an incredibly successful (and valuable) company, and only then to exit.
pluckytree 11y ago
You give up some control of the company or enough control that shareholders own a majority stake, which is likely the case with the companies you mention. You also are subject to a boatload of new regulations and reporting requirements. Going public is a way to raise lots of money. It doesn’t really give a company any tangible benefits. Especially recently, companies that have gone public have ended up being valued at less than their last funding round.

bsiemon 11y ago

Previous investors might be able to cash out in following rounds.

notacoward 11y ago
Doesn't that basically make it a Ponzi scheme?
- ryporter 11y ago
  In the same way that a non-dividend paying stock (such as BRK) is a Ponzi Scheme. Furthermore, there is an active secondary market for shares in Palantir. It's obviously far less liquid than the stock of other similarly sized public companies, but it's still an equity investment.