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because unlikely to be a bigger buyer later, so sell now or chase ipo. likely vc-controlled, so less risky to get the (winning) liquidity now. once you hit a c
by lmeyerov 6y ago
because unlikely to be a bigger buyer later, so sell now or chase ipo. likely vc-controlled, so less risky to get the (winning) liquidity now.
once you hit a certain level, you run out of buyers, and thus lose much of your ability to sell at multiples over value... so effective price ceiling.
- mooreds 6y ago> once you hit a certain level, you run out of buyers, There's always salesforce :). No, thank you for a cogent analysis; interesting to me how the incentives shift as you grow and how an IPO can be riskier than a sale.
- lmeyerov 6y agoyep, good comparison! crm bought tableau for $15B+ and google was fine w/ Looker @ $2B, and data is a clear high-ceiling market. not a lot of buyers at that level, so as soon as > $1B, and bought for way more than 10X on revenue, so unclear if/when they'd see $6B again. capital is cheap right now too, and while interest rates are expected to stay low for 3+ yr, in reality no one knows as the current situation is confusing economists...