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Other then cashing in equity has anyone found that a IPO has made a place better or worse for the employees? Big fan of Hashicorp products btw

bri3d 5y ago
I bet most answers to this question will conflate IPO problems with simple growth problems, and the two are hard to separate. After all, a constant drive for growth combined with accountability to a public board usually makes strong leadership and strategy challenging - it's easier IMO for public companies to fall into "we must do what is easy to hit our numbers now." On the flip side of the same coin, the ability to offer liquid equity and essentially pay employees using the company's projected growth (RSU issuance) is often financially lucrative for employees old and new and if done correctly, can attract a different group of really strong people who aren't in a place to take the startup gamble.
- throwaway1492 5y ago
  Hopefully for their RSU awardees the leadership team doesn't hire a bunch of sales/marketing types, thereby increasing operating costs, and tank the stock price. Mostly the market expects to see continued organic growth in these types of companies. Does anyone have experience here? I've only seen it twice.
nemo44x 5y ago
Better for your wallet, but worse for the job. The company changes. The type of people it attracts to leadership roles are not the kind of people you’d start a company with. They bring their “processes and methods” that they promise will scale the company and then they insulate themselves by hiring their friends to report to them. The culture is corrupt at this point and the technologists that built the company begin moving on to new challenges and you see an accelerating attrition. But the new leadership doesn’t mind as it removes credible threats to their questionable abilities. And they can backfill with more friends/lackies loyal to them. Within a few years post IPO the Composition of the company will have totally changed. The special place becomes a regular corporation. The hyenas will try to move on to the next Prize.
- ghaff 5y ago
  That seems… cynical. The sorts of processes and. Management needed for a larger company are different than those at a small one. You need more process. There’s no way around it.
  - Moto7451 5y ago
    And a lot of it is driven by compliance obligations as a public company. If you don’t want SOX work and processes, don’t go public (or work at a startup that’s about to go public). If you don’t want SOC2 work, don’t go after large companies.
    - zaphar 5y ago
      SOX work can be such a shock to a company the first time around. Because many of the systems have not had to meet these obligations before they typically aren't built in a way to control scope and SOX tends to bleed into places where it seems like it really shouldn't. Those systems and processes are critical to staying out of trouble with the law after going public.
    - ghaff 5y ago
      SOX is one thing. But you also probably get your sales systems and management, demand generation, sales enablement, expense control, etc. etc. better systematized. And yes it changes things. A lot of people who like small companies don’t like larger ones because things have to operate differently.
  - mschuster91 5y ago
    > The sorts of processes and. Management needed for a larger company are different than those at a small one. You need more process. There’s no way around it. There is: don't go public or issue stocks. In Germany, we are famous for non-public companies: the "Mittelstand" is largely owned by the founders or their descendants, which frees them from a lot of external influences - for better (companies can focus on long term goals instead of phony quarterly/activist investor-driven "KPI/OKR" goals, companies save on a lot of the bureaucracy that the law mandates for public/share-issuing companies) or worse (we're notorious for a lack of digitalization and progress as well as inheritance squabbles). An example are the retail chains ALDI and LIDL or manufacturers Bosch and Heraeus - all tens to hundreds of thousands of employees and many billions of net worth, but it's rare to even find somewhat reliable numbers on them.
deleted 5y ago
[deleted]
quartz 5y ago
I was at Facebook when the IPO happened and it was a pretty positive experience overall. We had an all-night hackathon the night before (one of the hacks was to wire into the "Nasdaq bell" button to post an opengraph story) and the whole company was mostly in a "stay focused and keep shipping" mode. The leadership team shared a few funny jokes each week at the all-hands events leading up to it talking about the roadshow but prep work for the IPO was mostly framed as "this thing we've got to do" and not as some kind of goal. The company was overwhelming focused on the work at hand. Overall the IPO was cool and I'm sure for many momentus, but as a somewhat newly acquired employee it was mostly a non-event and no one made me feel like I'd missed out by not joining earlier. Everyone was really just starting to feel comfortable at the newish physical HQ and morale was generally high. Most if not all the internal chatter was around the idea that "this journey is 1% finished" and at least everyone I knew there was in "let's do this and move on" mode. Mark had publicly committed to not selling any shares for at least a year so no one thought he was going to bail or anything. The stock price then proceeded to fall from $30's to the $10's and despite the on-paper financial hit for many of us it was kind of validating that "those silly people in wallstreet still don't get it" and that we weren't at the end of anything, we were still at the beginning. As FB then consistently grew for the next 9 years to nearly $400/share there was still plenty of upside so there wasn't much of a pre-IPO vs. post-IPO tribal thing going on either. In short, the culture was never built around "let's get this thing to IPO" so it wasn't really impacted negatively by reaching that milestone.
gpm 5y ago
I've seen the opposite, lack of a long promised IPO causing morale problems amongst employees...
- bink 5y ago
  If you want to really destroy morale tell your employees you're gonna IPO and then agree to an acquisition instead. Especially if that acquisition results in only a tiny bump in share price. Ask me how I know.
  - mavelikara 5y ago
    Ok, let me - how do you know?

bri3d 5y ago

I bet most answers to this question will conflate IPO problems with simple growth problems, and the two are hard to separate. After all, a constant drive for growth combined with accountability to a public board usually makes strong leadership and strategy challenging - it's easier IMO for public companies to fall into "we must do what is easy to hit our numbers now." On the flip side of the same coin, the ability to offer liquid equity and essentially pay employees using the company's projected growth (RSU issuance) is often financially lucrative for employees old and new and if done correctly, can attract a different group of really strong people who aren't in a place to take the startup gamble.

throwaway1492 5y ago
Hopefully for their RSU awardees the leadership team doesn't hire a bunch of sales/marketing types, thereby increasing operating costs, and tank the stock price. Mostly the market expects to see continued organic growth in these types of companies. Does anyone have experience here? I've only seen it twice.

nemo44x 5y ago

Better for your wallet, but worse for the job. The company changes. The type of people it attracts to leadership roles are not the kind of people you’d start a company with. They bring their “processes and methods” that they promise will scale the company and then they insulate themselves by hiring their friends to report to them. The culture is corrupt at this point and the technologists that built the company begin moving on to new challenges and you see an accelerating attrition. But the new leadership doesn’t mind as it removes credible threats to their questionable abilities. And they can backfill with more friends/lackies loyal to them. Within a few years post IPO the Composition of the company will have totally changed. The special place becomes a regular corporation. The hyenas will try to move on to the next Prize.

ghaff 5y ago
That seems… cynical. The sorts of processes and. Management needed for a larger company are different than those at a small one. You need more process. There’s no way around it.
- Moto7451 5y ago
  And a lot of it is driven by compliance obligations as a public company. If you don’t want SOX work and processes, don’t go public (or work at a startup that’s about to go public). If you don’t want SOC2 work, don’t go after large companies.
  - zaphar 5y ago
    SOX work can be such a shock to a company the first time around. Because many of the systems have not had to meet these obligations before they typically aren't built in a way to control scope and SOX tends to bleed into places where it seems like it really shouldn't. Those systems and processes are critical to staying out of trouble with the law after going public.
  - ghaff 5y ago
    SOX is one thing. But you also probably get your sales systems and management, demand generation, sales enablement, expense control, etc. etc. better systematized. And yes it changes things. A lot of people who like small companies don’t like larger ones because things have to operate differently.
- mschuster91 5y ago
  > The sorts of processes and. Management needed for a larger company are different than those at a small one. You need more process. There’s no way around it. There is: don't go public or issue stocks. In Germany, we are famous for non-public companies: the "Mittelstand" is largely owned by the founders or their descendants, which frees them from a lot of external influences - for better (companies can focus on long term goals instead of phony quarterly/activist investor-driven "KPI/OKR" goals, companies save on a lot of the bureaucracy that the law mandates for public/share-issuing companies) or worse (we're notorious for a lack of digitalization and progress as well as inheritance squabbles). An example are the retail chains ALDI and LIDL or manufacturers Bosch and Heraeus - all tens to hundreds of thousands of employees and many billions of net worth, but it's rare to even find somewhat reliable numbers on them.

deleted 5y ago

[deleted]

quartz 5y ago

I was at Facebook when the IPO happened and it was a pretty positive experience overall. We had an all-night hackathon the night before (one of the hacks was to wire into the "Nasdaq bell" button to post an opengraph story) and the whole company was mostly in a "stay focused and keep shipping" mode. The leadership team shared a few funny jokes each week at the all-hands events leading up to it talking about the roadshow but prep work for the IPO was mostly framed as "this thing we've got to do" and not as some kind of goal. The company was overwhelming focused on the work at hand. Overall the IPO was cool and I'm sure for many momentus, but as a somewhat newly acquired employee it was mostly a non-event and no one made me feel like I'd missed out by not joining earlier. Everyone was really just starting to feel comfortable at the newish physical HQ and morale was generally high. Most if not all the internal chatter was around the idea that "this journey is 1% finished" and at least everyone I knew there was in "let's do this and move on" mode. Mark had publicly committed to not selling any shares for at least a year so no one thought he was going to bail or anything. The stock price then proceeded to fall from $30's to the $10's and despite the on-paper financial hit for many of us it was kind of validating that "those silly people in wallstreet still don't get it" and that we weren't at the end of anything, we were still at the beginning. As FB then consistently grew for the next 9 years to nearly $400/share there was still plenty of upside so there wasn't much of a pre-IPO vs. post-IPO tribal thing going on either. In short, the culture was never built around "let's get this thing to IPO" so it wasn't really impacted negatively by reaching that milestone.

gpm 5y ago

I've seen the opposite, lack of a long promised IPO causing morale problems amongst employees...

bink 5y ago
If you want to really destroy morale tell your employees you're gonna IPO and then agree to an acquisition instead. Especially if that acquisition results in only a tiny bump in share price. Ask me how I know.
- mavelikara 5y ago
  Ok, let me - how do you know?