What are some of the most important things to factor in when deciding when to take a company public? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
Four things to consider before taking a company public:
- Predictability, predictability, predictability. Demand machine's funnel science, repeat customers/business, customer churn, year-over-year cohorts, leverage (customer acquisition costs), distribution costs, etc.
- Whether the company has developed the "thick skin" to brush aside short-term perturbations, knowing fully well that staying power is key in this raucous coliseum of the public markets.
- Employee liquidity for them to checkpoint a bit of their hard work, take some deep breaths, and then start the next sprint in the marathon that company-building is.
- For B2B companies, penetration within rich customers. The Global 2000 takes longer to trust a new story, and they like open financials to judge longevity of their "partner" innovators. Going public can help with that journey, provided the early-majority mid-market customer has blessed and baked the product and customer service for a few years. The brand can get a shot in the arm, if the company had an honest Main Street story for Wall Street. The two Streets can go hand-in-hand and fuel each other in a virtuous cycle, if the company were authentic. By authentic, I mean, just the right balance between honest products/service and a dreamy-eyed storytelling.
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