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IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

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Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#41

Post by docker_up »

chollida1 wrote: post #3

The banks backing spotify made about as much from their "non IPO" compared to what they would have made from a traditional IPO so I don't think too many bulge bracket banks are worried about this trend. https://www.bloomberg.com/news/articles/2018-03-26/spotify-l... > Avoiding the lock-up period was a very important part of our decision to list Spotify directly, but there were also clear financial benefits. This was…

> Why invest in your company if you don't have the conviction that it will be worth more 3-6 months from now.

This is a nonsense statement. Companies control their revenues, profits, budget, etc. They have very little control over their stock price, and they especially have no control over short term stock prices, like 3 to 6 months. Companies should be focusing on the long term and not looking at the stock price, but employees care about liquidity.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#42

Post by icebraining »

zaksoup wrote: post #18
wildmusings wrote: post #16

Earlier quoted context omitted.

The whole point of owning part of a company is to collect dividends and/or sell your shares for more than you bought them for. But without going public, it can be difficult to do the latter.

This doesn't seem true. What about having voting rights on board members/company direction? How do worker-owned co-ops even function if this is the 'whole point of owning part of a company'. Why do we take 'maximize shareholder value' as though it's some rule handed down by god and the only possible way to operate a company, public or otherwise? It just isn't the case.

> How do worker-owned co-ops even function if this is the 'whole point of owning part of a company'.

They would work want to collect dividends - in the form of higher wages or other non-monetary compensation.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#43

Post by varvar »

ironjunkie wrote: post #31
jjuhl wrote: post #29

Earlier quoted context omitted.

Why are you trying to provide "reasons"? You'r a company. You just want to make the maximum amount of money. Everyone knows this. Why try to pretend anything else?

Short answer: you are right, the goal is to make the maximum amount of money. I believe that justifying themselves with other reasons allows them to make more money that if they openly said they want to "Make money". Basically, PR and a nicely crafted story maximizes the amount of money you get in return. People like nice stories.

Yeah but it's kind of bad feel of slight deception to it, no?

The whole story thing, I think it's sometimes a bit of a excessive Western thing, that yes it works, that may at some point become even boring to listen to,

Yet another cooked story. Rags2riches and what not. The garage (but son of a lawyer or a banker) the rise to fame and glory (from the garage right) blabla.

It is damaging but it's too contextual and subtle to see in a civilization hat still currently likes to cut off a lot of context. Even a lot of such stories are possible only due to big de-contextualization culture wise, which forces everyone into this deception game. Which on top brings money, but must have negative effects which are very hard to grasp/see.

I don't know. This is too deep and "you" are not supposed to talk about how it works in public.. don't ask don't tell.. sneaky operators.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#44

Post by will_brown »

gwbas1c wrote: post #27
beavisthegenius wrote: post #9

Earlier quoted context omitted.

It's to reward employees who may need to sell stock based compensation to pay bills and other things that require currency.

> It's to reward employees who may need to sell stock based compensation to pay bills and other things that require currency. Don't spend money before you have it. On the other hand, equity is worthless until it's fungible. Fungibility problems turn into retention problems. Otherwise, the company has to pay large bonuses to key employees who may decide to cut their losses.

>Don't spend money before you have it.

That’s what the employee equity is in the first place...a way for the startup to spend money it doesn’t have to get the employee. The employee, in theory or at least tech anyway, is sacrificing a better salary at an established (likely public) company to join the startup in exchange for that small chance they make it up with the equity on the backside.

Although everyone loves to pretend the US is a Captialist system...it’s not, it’s debt driven. The entire Country is premised on spending money it doesn’t have in hopes the can turn profit before it all crashes, and that is reflected in every single high-growth tech startup seeking to IPO.

Want the employees to hold on longer for benefit of investors...change the whole system and reverse the tax rates of wages and capital gains. Why should the hard working employee pay 40% of their wage to Uncle Sam while the investor who sits on their ass pays 10% so long as they can hold on for a year?

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#45

Post by tetromino_ »

gwbas1c wrote: post #27
beavisthegenius wrote: post #9

Earlier quoted context omitted.

It's to reward employees who may need to sell stock based compensation to pay bills and other things that require currency.

> It's to reward employees who may need to sell stock based compensation to pay bills and other things that require currency. Don't spend money before you have it. On the other hand, equity is worthless until it's fungible. Fungibility problems turn into retention problems. Otherwise, the company has to pay large bonuses to key employees who may decide to cut their losses.

> Don't spend money before you have it.

Sometimes it can be hard to time your expensive emergencies. Drunk drivers, cancer cells in a loved one's body, natural disasters, and law enforcement officers having a bad day rarely wait for the moment when your assets are at their most liquid.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#46

Post by varvar »

jjuhl wrote: post #33
ironjunkie wrote: post #31

Earlier quoted context omitted.

Short answer: you are right, the goal is to make the maximum amount of money. I believe that justifying themselves with other reasons allows them to make more money that if they openly said they want to "Make money". Basically, PR and a nicely crafted story maximizes the amount of money you get in return. People like nice stories.

Well, most people are ignorant and naive.

But you make a lot of specific efforts to keep them such society wise? If you keep them ignorant en masse, then you can introduce only partial services, charge, and then introduce a bit more, charge.. etc.

It is possible to start off in a great way, instead of this way which is very manipulative, and depends on keeping them ignorant.

Anyway maybe it was just the typical programmer arrogance, so then I am.. still not sorry.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#47

Post by kerbalspacepro »

jjuhl wrote: post #29
rayhano wrote: post #20

I posted this article because we’re planning to do the same and wanted to gather thoughts from the tech community (the financial community has commented on this sufficiently to help inform our process). I thought it might help to share our motivations for eventually listing our company vs taking more VC: a. The public markets force transparency. This aligns with our values. b. Governance enforced by VCs (especially i…

Why are you trying to provide "reasons"? You'r a company. You just want to make the maximum amount of money. Everyone knows this. Why try to pretend anything else?

Companies aren't just supposed to make the maximum amount of money. If they were, then everything would be a bank.

Companies are better thought of machines, like tractors or printing presses. You buy a tractor and a printing press to ultimately make money, but the tractor and the printing press actually DO things. That is why it's importing to provide reasons.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#48

Post by kerbalspacepro »

krelian wrote: post #35
wildmusings wrote: post #16

Earlier quoted context omitted.

The whole point of owning part of a company is to collect dividends and/or sell your shares for more than you bought them for. But without going public, it can be difficult to do the latter.

Isn't the whole point of owning a company is have a share of its profits? That's why the stock market never made sense to me. The price and price gains or losses on stocks are not related at all to the profits.

The point of owning a company is to have a share of its profits. But when you do that, you also sign onto a multitude of risks (like the profit going out the window!)

So the stock market allows you to take those risks and mitigate them in near-as-possible real time.

Re: IPOs are expensive and cumbersome – Try a direct listing, like we did at Spotify

#50

Post by arcticbull »

ironjunkie wrote: post #39
nkohari wrote: post #36

Earlier quoted context omitted.

Not sure what you mean by this. Most retirement accounts are investment portfolios. I don't think they meant that people should reinvest their entire portfolio in the offering, or invest money they couldn't afford to lose.

I think he means that stock picking is way more dangerous than a well diversified "safe" Fund like most retirement accounts push you to invest in (with high management fees of course).

Retirement accounts can just as easily invest in Vanguard funds, side-stepping the 'high management fees' issue of target-date funds. Picking is more dangerous when you're playing to retire vs. playing to build wealth. Further, your asset mix should become more and more conservative over time.
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