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Curious why going public deserves an applause. Is being private a bad thing?

by blocked_again 9y ago

brink 9y ago
It's more of a "congrats on the money" applause.
tdb7893 9y ago
It signifies a milestone. Being single isn't bad but there's no problem celebrating a wedding
whoisjuan 9y ago
Well. For Y-Combinator is a win. It's an opportunity to convert their equity to cash and get a return on their investment.
- rockostrich 9y ago
  Private companies that operate at a positive cash-flow are free to distribute profits to shareholders. Sure, going public makes it easier for investors to liquidate their stock, but that doesn't mean you can't get returns from investments in private companies.
  - rlanday 9y ago
    As a practical matter, Dropbox is operating at a loss, yet has value as a company because of the expectation that it will hopefully someday turn a profit. IPOing allows Y Combinator, which specializes in early stage investment, to realize a return on their investment and invest in more companies without having to wait even longer.
jamestimmins 9y ago
It's simply a major milestone and (theoretically) a sign that the company has reached a point of stability and market size that it can weather public markets. It's also an important liquidation event for employees and investors.
deleted 9y ago
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deleted 9y ago
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debt 9y ago
You don’t have to clap.
stagger87 9y ago
One could probably make the argument it deserves the opposite of applause.
pg_bot 9y ago
When you take investment money, it comes with the expectation that there will be a liquidity event. (going public, selling to another corporation) Being private is not a bad thing at all, in fact I would expect most entrepreneurs would prefer that their companies remain private. However you've accepted a faustian bargain once you take money from someone else. Going public is seen as the most desirable liquidity event, since the company still controls its own agency and you maximize choice if/when you want to sell your stake in ownership.
- yeukhon 9y ago
  The bot has spoken. The most important thing out of all, really, is funding through public market.
omegaworks 9y ago
If you believe the profits of our industry should be captured by more than just a few uber-wealthy, well-connected individuals, you applaud. Buying a stock on the NYSE is doable with a bit of extra cash and the touch of a button in a trading app these days. Some would argue that even this is too high a barrier for the poor and marginalized, but it makes it possible for at least a portion of the professional class to participate.
jartelt 9y ago
Assuming the IPO goes well they should get applause because YC and employees will get liquidity. That said, if the IPO is priced low, employees and some investors may not get a large windfall and may not celebrating too much (kind of like how you do not always celebrate a large down round).

Curious why going public deserves an applause. Is being private a bad thing?

brink 9y ago

It's more of a "congrats on the money" applause.

tdb7893 9y ago

It signifies a milestone. Being single isn't bad but there's no problem celebrating a wedding

whoisjuan 9y ago

Well. For Y-Combinator is a win. It's an opportunity to convert their equity to cash and get a return on their investment.

rockostrich 9y ago
Private companies that operate at a positive cash-flow are free to distribute profits to shareholders. Sure, going public makes it easier for investors to liquidate their stock, but that doesn't mean you can't get returns from investments in private companies.
- rlanday 9y ago
  As a practical matter, Dropbox is operating at a loss, yet has value as a company because of the expectation that it will hopefully someday turn a profit. IPOing allows Y Combinator, which specializes in early stage investment, to realize a return on their investment and invest in more companies without having to wait even longer.

jamestimmins 9y ago

It's simply a major milestone and (theoretically) a sign that the company has reached a point of stability and market size that it can weather public markets. It's also an important liquidation event for employees and investors.

deleted 9y ago

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deleted 9y ago

[deleted]

debt 9y ago

You don’t have to clap.

stagger87 9y ago

One could probably make the argument it deserves the opposite of applause.

pg_bot 9y ago

When you take investment money, it comes with the expectation that there will be a liquidity event. (going public, selling to another corporation) Being private is not a bad thing at all, in fact I would expect most entrepreneurs would prefer that their companies remain private. However you've accepted a faustian bargain once you take money from someone else. Going public is seen as the most desirable liquidity event, since the company still controls its own agency and you maximize choice if/when you want to sell your stake in ownership.

yeukhon 9y ago
The bot has spoken. The most important thing out of all, really, is funding through public market.

omegaworks 9y ago

If you believe the profits of our industry should be captured by more than just a few uber-wealthy, well-connected individuals, you applaud. Buying a stock on the NYSE is doable with a bit of extra cash and the touch of a button in a trading app these days. Some would argue that even this is too high a barrier for the poor and marginalized, but it makes it possible for at least a portion of the professional class to participate.

jartelt 9y ago

Assuming the IPO goes well they should get applause because YC and employees will get liquidity. That said, if the IPO is priced low, employees and some investors may not get a large windfall and may not celebrating too much (kind of like how you do not always celebrate a large down round).