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If they didn't take VC Money it would be great. For a VC, a startup refusing to go IPO is like a bank that takes your money offering you a high interest on your

If they didn't take VC Money it would be great. For a VC, a startup refusing to go IPO is like a bank that takes your money offering you a high interest on your checking account, but when you go to get it out, says oops sorry, it went into a fixed deposit.

OnlineCourage 10y ago
Actually, it's more like a nice shiney bank which gives a huge interest rate on your deposits, but you go to the bank and the doors are locked, and you can't get in to make a deposit...but you can kind of see opaquely through the window that there are a lot of amazing bankers in there making tons of money, but they won't look at your or acknowledge you, because they are too busy making money on the money they already have.
- HappyTypist 10y ago
  You can thank regulation for that.
  - Twirrim 10y ago
    ... what?
    - aianus 10y ago
      I assume he's referring to the reporting requirements for public companies. Without those regulations more companies would go public. (Of course, without the reporting requirements they probably wouldn't IPO for as much as every offering would need a bigger 'possible fraud' discount)
      - theseatoms 10y ago
        > (Of course, without the reporting requirements they probably wouldn't IPO for as much as every offering would need a bigger 'possible fraud' discount) So it follows that companies would voluntarily report, as to obtain a higher IPO price.
        aianus 10y ago
        Sure, but then what's to stop them from ceasing to report 6 months later when the lockup period expires and the insiders cash out?
- nevir 10y ago
  You also gave them money, in that analogy
- rattray 10y ago
  That's only true if Dropbox is really growing revenues at a fast pace. If they're growing revenues at a slow pace – or have a low profit margin – it's more like looking in through an opaque window at bankers doing less with your money than other bankers could. You'd much rather withdraw that money and invest it nextdoor.
Retric 10y ago
If they toss out dividends then there are plenty of people happy to buy that stock from the VC. Yes, the VC wants to pump and dump, but that does not mean the company's need to respond in kind.
andrewfong 10y ago
There is (sometimes) a distinction between an IPO and cashing out. VCs may be able to sell some of their stake on the secondary market if they want to cash out. I think some Facebook investors and early employees did this actually. Also worth noting that "no rush to IPO" is not the same as "never IPO". As a VC, you're investing with the understanding that an exit is many, many years away (if it ever comes at all), on the hope that this longer time horizon gives founders the flexibility to do crazy unicorn stuff. I can imagine a CEO telling the VCs "hey, we're going to wait an extra 5 years to IPO, but that's because we want to do crazy 10x return stuff that's difficult to pull off as a public company because of required SEC filings, activist shareholders, etc.".

OnlineCourage 10y ago

Actually, it's more like a nice shiney bank which gives a huge interest rate on your deposits, but you go to the bank and the doors are locked, and you can't get in to make a deposit...but you can kind of see opaquely through the window that there are a lot of amazing bankers in there making tons of money, but they won't look at your or acknowledge you, because they are too busy making money on the money they already have.

HappyTypist 10y ago
You can thank regulation for that.
- Twirrim 10y ago
  ... what?
  - aianus 10y ago
    I assume he's referring to the reporting requirements for public companies. Without those regulations more companies would go public. (Of course, without the reporting requirements they probably wouldn't IPO for as much as every offering would need a bigger 'possible fraud' discount)
    - theseatoms 10y ago
      > (Of course, without the reporting requirements they probably wouldn't IPO for as much as every offering would need a bigger 'possible fraud' discount) So it follows that companies would voluntarily report, as to obtain a higher IPO price.
      - aianus 10y ago
        Sure, but then what's to stop them from ceasing to report 6 months later when the lockup period expires and the insiders cash out?
nevir 10y ago
You also gave them money, in that analogy
rattray 10y ago
That's only true if Dropbox is really growing revenues at a fast pace. If they're growing revenues at a slow pace – or have a low profit margin – it's more like looking in through an opaque window at bankers doing less with your money than other bankers could. You'd much rather withdraw that money and invest it nextdoor.

Retric 10y ago

If they toss out dividends then there are plenty of people happy to buy that stock from the VC. Yes, the VC wants to pump and dump, but that does not mean the company's need to respond in kind.

andrewfong 10y ago

There is (sometimes) a distinction between an IPO and cashing out. VCs may be able to sell some of their stake on the secondary market if they want to cash out. I think some Facebook investors and early employees did this actually. Also worth noting that "no rush to IPO" is not the same as "never IPO". As a VC, you're investing with the understanding that an exit is many, many years away (if it ever comes at all), on the hope that this longer time horizon gives founders the flexibility to do crazy unicorn stuff. I can imagine a CEO telling the VCs "hey, we're going to wait an extra 5 years to IPO, but that's because we want to do crazy 10x return stuff that's difficult to pull off as a public company because of required SEC filings, activist shareholders, etc.".