When I was in my twenties my biggest goals were to take my company public and get on the cover of Fortune. I wouldn’t mind getting some free exposure from Fortune (assuming it would help one of my ventures), but you couldn’t pay me to take my business public. My father has been CEO of various public companies and he isn’t shy about explaining why a company smaller than a billion dollars should be private. It is just too risky and expensive to be a public company in today’s environment.
Fred Wilson has an interesting post suggesting, “IPOs just aren’t what they used to be.” He explains that “First, it is way too expensive to go public. And if you don’t get your offering done, which is not an unusual occurrence, you are left with a huge bill to pay (and no cash to pay it with). And if you get your offering done, your company will likely be valued lower than it would be valued in a late stage private financing.” The best case scenario for most companies looking for an exit is an acquisition.
