A lead VC (and there the dealmaster) who was involved in more than one exit before.
Ask HN: What are some indicators that a company will have an IPO or exit?
21–30 of 34 posts
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
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Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#23I've been with two companies that have IPO'd recently - Twilio and Okta - but nothing here reflects those organizations. If a company is heading towards an IPO, they MUST already have a CFO in place, probably 3-5 years in advance. While there are financial systems required, there are practices, reports, etc etc that require day after day, month after month, and quarter after quarter monitoring. It's not something tha…
Which is why doing an RTO is an attractive alternative. Although they seem more popular in Canada for some reason.
A Reverse Take-Over is where a company pays for a shell corp that is listed on a public exchange and the shell officially "takes over" the company, then changes it's name to that of the "purchased" company, which is a great shortcut to a public offering.
But the need for a CFO is the same, the books have to follow the standard public process.
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#24Profitability. IPOs for money-losers went out in the first dot-com boom. The scale of the business has to be reasonably large. Market cap in at least 8 figures.
Profitability? You must be kidding. I'm guessing you don't follow many IPOs. Most of these companies lose money every quarter with no end in sight.
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#25Yes. When a company is 'operationally cash flow positive' which is to say they make enough money that not only does their bank account balance increase each quarter, but also their future spending to refresh their equipment and offices etc would not cause their cash balance to go below its current point. That company will have the opportunity to 'exit' (sell themselves to another company) or IPO. To quote the former…
"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#26If you're employed at the company, I'm pretty sure you'd know. However, as an outsider look for regulatory signs such as hiring of new finance/CFO roles. Quiet period without new product announcements or features (out of the ordinary).
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#27Yes. When a company is 'operationally cash flow positive' which is to say they make enough money that not only does their bank account balance increase each quarter, but also their future spending to refresh their equipment and offices etc would not cause their cash balance to go below its current point. That company will have the opportunity to 'exit' (sell themselves to another company) or IPO. To quote the former…
Blekko exited by selling to IBM. That was a pure technology buy; the public search engine was killed.
True and true, but I'm not sure what you were trying to say. Blekko never did discover the secret to competing with the #1 and #2 search engine companies spending over $5B a year to buy search traffic :-). However IBM found great value in a technology that could effectively crawl and index billions of pages, that is, remarkably, still a hard problem even today.
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#28Profitability. IPOs for money-losers went out in the first dot-com boom. The scale of the business has to be reasonably large. Market cap in at least 8 figures.
Have you looked at recently IPO'ed companies? Many dont turn a profit. Salesforce only started turning a profit last year I think.
I'll just name a couple of recently or semi recently IPOed companies of varying reputations that do not turn a profit. All are way above 8 figure market caps. Are you sure you didn't mean 9 figures or at least closing in on 9 figures.
- New Relic
- Atlassian
- ServiceNow
- WorkDay
- Splunk
- Box
- Godaddy
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#29Thanks for all the answers. From what I infer, the one thing that's consistent is to look for year on year revenue growth. A company that achieves that will have a healthy exit. A company that doesn't will be forced to a lackluster IPO or sold off for the minimum value or will shut shop.
Re: Ask HN: What are some indicators that a company will have an IPO or exit?
#30Profitability. IPOs for money-losers went out in the first dot-com boom. The scale of the business has to be reasonably large. Market cap in at least 8 figures.
Have you looked at recently IPO'ed companies? Many dont turn a profit. Salesforce only started turning a profit last year I think. I'll just name a couple of recently or semi recently IPOed companies of varying reputations that do not turn a profit. All are way above 8 figure market caps. Are you sure you didn't mean 9 figures or at least closing in on 9 figures. - New Relic - Atlassian - ServiceNow - WorkDay - Splun…
I had a list of companies in Simplenote. It seems like they all still fit. Another almost 20 tech companies without profits yet:
- Okta
- Wix
- Shopify
- Square
- Yext
- RingCentral
- Zillow
- LogMeIn
- Netsuite
- Trivago (though now majority owned by Expedia)
- Youku (Chinese tube site)
- Tableau
- FireEye
- Pablo Alto Networks
- Proofpoint
- Verint
- Imperva