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Some reasons why a company with $10M/year in revenue may not want to IPO: 1. Due to recent regulations (introduced after the 2000 dot-com crash), the fixed cos
by umeshunni 8y ago
Some reasons why a company with $10M/year in revenue may not want to IPO:
1. Due to recent regulations (introduced after the 2000 dot-com crash), the fixed cost of going IPO (SOX compliance, putting internal controls in place, audits etc) have significantly gone up.
2. The additional scrutiny and public visibility that comes from going public is a drag on management bandwidth, employee morale and attention.
3. Private money is now plentiful and cheap, so it might actually be cheaper just to take private investors than public.
4. Public markets prefer stable, predictable companies with a known well understood strategy. Consider how often Tesla is in the public eye and how they might have benefited from staying private longer given their unpredictable business and strategy.