4 ms·

Yeah weird how people hold up IPO as a holy grail. Its the worst thing to do if you are actually passionate about the company, if it is your labor of love. Its

Yeah weird how people hold up IPO as a holy grail. Its the worst thing to do if you are actually passionate about the company, if it is your labor of love. Its the best thing to do if you want to make a lot of money from your money machine and are largely apathetic about the outcome of the business itself. Easy enough to find the next MBA graduate to feign passion for you while they are just trying to sell the company.

imranq 10y ago
why is this downvoted? every company I've worked at that has IPO'd companies has been, in my experience, soul-sucking.
muninn_ 10y ago
Yeah I lean toward this view as well. The point of an IPO is to raise capital. But when you do this, unless you own 51% of the company or there is a small group of like-minded individuals that own 51% of the company, you can wind up losing control and instead of doing things Wall Street doesn't like, you're going to have to focus on profitability and pleasing shareholders. It's one route to take, but not the only one.
- hagbarth 10y ago
  Yeah, but AirBnB took that route when they got private investors. They expect to get their money back with a good ROI. That would be through an IPO or acquisition, either way you loose control of your company.
  - zenlikethat 10y ago
    True, you lose some control, but a small board of a private company is much easier to convince and compel on long-term vision and plans than the general public.
aanm1988 10y ago
> Yeah weird how people hold up IPO as a holy grail Because employees actually gain out of it. That's also a benefit as it gives more people financial freedom and they can go off and do their own companies. Instead these people get locked in to AirBnB for years.
- elastic_church 10y ago
  Companies always have the option of giving dividends to common stock shareholders, buying out shareholders, simply giving bonuses or any number of things if they didn't continue to reinvest all capital and pursue losses. Private companies even issue bonds on public bond markets, these can be as large or larger than equivalent equity offerings on the stock markets. Don't let the mechanisms pursued by a handful of VC firms in Silicon Valley distort your understanding of capital formation.
  - hkmurakami 10y ago
    Prime example is Cargill. $100B in revenues, privately held. https://www.cargill.com/about/financial/credit-rating-information https://www.cargill.com/about/financial/credit-rating-inform...
    - elastic_church 10y ago
      If any of these tech companies decided to just go with 6 months of positive revenues, they could issue bonds in Europe representing waaay cheaper capital than VCs and not have to worry about it for the next two decades.

imranq 10y ago

why is this downvoted? every company I've worked at that has IPO'd companies has been, in my experience, soul-sucking.

muninn_ 10y ago

Yeah I lean toward this view as well. The point of an IPO is to raise capital. But when you do this, unless you own 51% of the company or there is a small group of like-minded individuals that own 51% of the company, you can wind up losing control and instead of doing things Wall Street doesn't like, you're going to have to focus on profitability and pleasing shareholders. It's one route to take, but not the only one.

hagbarth 10y ago
Yeah, but AirBnB took that route when they got private investors. They expect to get their money back with a good ROI. That would be through an IPO or acquisition, either way you loose control of your company.
- zenlikethat 10y ago
  True, you lose some control, but a small board of a private company is much easier to convince and compel on long-term vision and plans than the general public.

aanm1988 10y ago

> Yeah weird how people hold up IPO as a holy grail Because employees actually gain out of it. That's also a benefit as it gives more people financial freedom and they can go off and do their own companies. Instead these people get locked in to AirBnB for years.

elastic_church 10y ago
Companies always have the option of giving dividends to common stock shareholders, buying out shareholders, simply giving bonuses or any number of things if they didn't continue to reinvest all capital and pursue losses. Private companies even issue bonds on public bond markets, these can be as large or larger than equivalent equity offerings on the stock markets. Don't let the mechanisms pursued by a handful of VC firms in Silicon Valley distort your understanding of capital formation.
- hkmurakami 10y ago
  Prime example is Cargill. $100B in revenues, privately held. https://www.cargill.com/about/financial/credit-rating-information https://www.cargill.com/about/financial/credit-rating-inform...
  - elastic_church 10y ago
    If any of these tech companies decided to just go with 6 months of positive revenues, they could issue bonds in Europe representing waaay cheaper capital than VCs and not have to worry about it for the next two decades.