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Airbnb Raises $555M in Funding

bloomberg.com

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Re: Airbnb Raises $555M in Funding

#11

Post by forthefuture »

aetherson wrote: post #9
palakchokshi wrote: post #2

Someone please correct me if I'm wrong in assuming this but it seems a company like AirBnb would only raise private capital instead of going IPO because it's financials suck. I mean if you were doing really well and had profits that you were pumping back into the company you would want to IPO to raise money for lower dilution right? A private round might cause much more dilution than an IPO. Maybe I'm missing somethi…

Welllll.... there are hassles associated with being a public company beyond merely "people holding your feet to the fire of financials." You have to comply with Sarbanes-Oxley, which is just a real pain in the ass, for example (source: I worked for NetSuite as they went public, and coming into compliance with SarbOx was a bunch of work). A private funding round with a limited controlled equity buyback from employees…

Even accepting all of those things, if the company was profitable and had anything in the war chest they wouldn't have to take more funding. They're either getting capital for war or survival which means what they have now isn't enough for either.

Re: Airbnb Raises $555M in Funding

#13

Post by [deleted] »

_RPM wrote: post #3

Hey Airbnb founders/employees. Fuck you. Working for you isn't rocket science, so fuck you and all your elitist attitudes not even considering me for employment because I didn't go to Harvard|Stanford|Insert Top 10 school here.

[deleted]

Re: Airbnb Raises $555M in Funding

#15

Post by hkmurakami »

palakchokshi wrote: post #2

Someone please correct me if I'm wrong in assuming this but it seems a company like AirBnb would only raise private capital instead of going IPO because it's financials suck. I mean if you were doing really well and had profits that you were pumping back into the company you would want to IPO to raise money for lower dilution right? A private round might cause much more dilution than an IPO. Maybe I'm missing somethi…

Dilution is a function of valuation and amount raised. Assuming they'd raise the same amount from public or private markets, valuation is the only factor in question.

It is not a given that public markets would price Airbnb higher than private markets. In fact, recent history suggests that the opposite often happens.

So no, IPOing is not necessarily less dilutive. Also, since their valuation is $20B+, dilution differences are a rounding error.

Re: Airbnb Raises $555M in Funding

#16

Post by [deleted] »

palakchokshi wrote: post #2

Someone please correct me if I'm wrong in assuming this but it seems a company like AirBnb would only raise private capital instead of going IPO because it's financials suck. I mean if you were doing really well and had profits that you were pumping back into the company you would want to IPO to raise money for lower dilution right? A private round might cause much more dilution than an IPO. Maybe I'm missing somethi…

[deleted]

Re: Airbnb Raises $555M in Funding

#17

Post by hkmurakami »

ameyamk wrote: post #10

Why airbnb needs so much cash? They are not exactly subsidizing either side of the market?

Personnel costs and marketing costs as they expand to new markets.

Further experimentation with vertical integration (Airbnb owning room servicing teams, or Airbnb owning actual apartments/hotels).

Re: Airbnb Raises $555M in Funding

#18

Post by GreenPlastic »

forthefuture wrote: post #11
aetherson wrote: post #9

Earlier quoted context omitted.

Welllll.... there are hassles associated with being a public company beyond merely "people holding your feet to the fire of financials." You have to comply with Sarbanes-Oxley, which is just a real pain in the ass, for example (source: I worked for NetSuite as they went public, and coming into compliance with SarbOx was a bunch of work). A private funding round with a limited controlled equity buyback from employees…

Even accepting all of those things, if the company was profitable and had anything in the war chest they wouldn't have to take more funding. They're either getting capital for war or survival which means what they have now isn't enough for either.

Or capital is cheap and it doesn't hurt to raise it while you can.

Re: Airbnb Raises $555M in Funding

#20

Post by throwaway12344 »

It's so their founders can keep their wealth in the family. They grew up from upper middle class families, so they have a duty to themselves and the world to pass down large amounts of wealth.

They also would want higher net worth so they can get tax benefits from donating to charity and in return it makes them look like they are so generous when in reality they couldn't care less about anyone else but themselves. They have their cake and eat it too, because the press will glamorize them for their "philanthropy"

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