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An IPO provides 1) a fundraising opportunity 2) a liquidity event 3) an opportunity to fulfill contractual obligations One of the conditions of their recent de
by supster 9y ago
An IPO provides 1) a fundraising opportunity 2) a liquidity event 3) an opportunity to fulfill contractual obligations
One of the conditions of their recent debt financing was that they IPO within a certain time frame. If they believe that they don't need additional funding at the moment or can get better terms then they are simply fulfilling criteria #2 and #3 with their unique IPO. I imagine Spotify can get decent debt financing terms b/c they have such a steady and predictable source of revenue (though not necessarily profit).
- JumpCrisscross 9y ago> One of the conditions of their recent debt financing was that they IPO within a certain time frame Spotify is not IPO’ing. They are direct listing their stock. Because of a simple drafting error on part of TPG et al Spotify is side-stepping the bulk of the delayed IPO penalties.
- iav 9y agoThis is exactly why they are direct listing. TPG is screaming bloody murder but then again they claim to be the masters of structuring complex deals so they can’t claim that a startup snuck in a loophole under them.
- bogomipz 9y agoI'm aware of what an IPO provides. >" I imagine Spotify can get decent debt financing terms b/c they have such a steady and predictable source of revenue (though not necessarily profit)." Again if this true, why would they raise a billion dollars in convertible debt?
- Eridrus 9y ago> Again if this true, why would they raise a billion dollars in convertible debt? Because debt is often a better instrument?