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So now the idea of a successful company is “what it IPOd for” not “whether it makes a profit”? Spotify had a market cap of $26 billion at IPO. It’s now worth
by scarface74 4y ago
So now the idea of a successful company is “what it IPOd for” not “whether it makes a profit”?
Spotify had a market cap of $26 billion at IPO. It’s now worth $24.2 billion. If you had bought the stock at IPO and held onto it your ROI would have been negative. The VCs and investment bankers would have counted you as one of “the greater fools” (https://www.investopedia.com/terms/g/greaterfooltheory.asp https://www.investopedia.com/terms/g/greaterfooltheory.asp).
By comparison, the S&P 500 is up 50% since Spotify’s IPO
- ivalm 4y agoThis is a discussion on VC investment strategy. So the question is more like: if you invested in Spotify series A or B and exited at IPO did you have a good RoI? The answer is yes, you had an extremely good ROI.
- scarface74 4y agoThis article is about just the opposite. > My bootstrapped mobile gaming company achieved success… He was specifically talking about a company not getting VC funding and “growing profitably”. In the last decade or so, I can’t think of one tech company that was profitable before it IPOd.