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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?

#31
In addition to the hiring of an experienced CFO, mentioned already, in the run-up to an IPO you may see:

- A cleanup of administrative processes such as HR. Standardisation of leave, expenses, release of a overly-detailed employee handbook, change of employment contracts. Exec HR contingency plans, documented reporting lines. Beyond HR, compliance may also be given more attention than usual.

- Removal of minor shareholders, cleaning up equity structure, if it was not done exceptionally well from the beginning.

- A PR push with a common focussed narrative on the companies aims & growth. Following this, announcements of comparatively minor things that support it. Lots of quotes from key management. However, as you draw closer to d-day there will be a quiet period where no information will be released as part of the process.

- Some key execs removing themselves from day to day ops while its ongoing. Guarded language during announcements as mentioned previously, especially in the final stages.

There are presumably more indicators based on the companies performance, investors and the market in general, but I think it would be guesswork without being in the loop on their corporate strategy.

Re: Ask HN: What are some indicators that a company will have an IPO or exit?

#32
post #15

Profitability. 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…

Atlassian is an odd example here - they've been profitable for a decade: http://www.businessinsider.com/atlassian-files-for-ipo-2015-...

Re: Ask HN: What are some indicators that a company will have an IPO or exit?

#33
post #32

Earlier quoted context omitted.

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…

Atlassian is an odd example here - they've been profitable for a decade: http://www.businessinsider.com/atlassian-files-for-ipo-2015-...

Yes, I should have specified the more unique situation Atlassian is in. They say they were always profitable, but we have had around 6 earnings reports since their IPO. I don't think they have turned a profit once. They also don't seem like they will in the near future.

Do you think it should still be included with an asterisk or not included? I think an asterisk with an explanation would've been best.

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