With so much late-stage money available, why are tech companies going public now?

TechCrunch | 7/12/2019 | Staff
donuzumaki (Posted by) Level 3
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Ajay Chopra co-founded Pinnacle Systems in his living room and grew it to a multi-billion dollar public company before becoming a venture capitalist with Trinity Ventures.

Ringing the Nasdaq market bell was the thrill of a lifetime — both when I did it as a founder and also vicariously as a VC via my incredible founders who have taken their companies public. There’s nothing like seeing the baby you nurtured mature into a multibillion-dollar public entity.

Times - Influx - Venture - Capital - Companies

But times have changed. The dramatic influx of late-stage venture capital is enabling companies to slow walk their public offerings. In addition, the accumulation of mountains of cash by strategic buyers and the rise of private equity buy-out firms are making other forms of exits viable options.

Case in point: The number of publicly listed companies has dropped 52%, but entrepreneurship momentum hasn’t slowed; it has actually accelerated. Many of the companies that are finally going public this year are doing so several years after they could have — and would have — in years past. When Uber went public this year, its valuation was so large that it would have registered as 280 on this year’s Fortune 500 list. TransferWise prolonged any move to the public markets through a secondary sale that allowed them to stay private while more than doubling their valuation.

IPOs - Everyone - Company - Companies - PitchBook

IPOs aren’t for everyone or every company — or indeed for most companies. According to PitchBook, only 3% of venture-backed companies in the last decade eventually went public. Most startups that don’t go public never had the option to do so. However, some founders who could IPO are actively choosing to delay IPOs due to the many challenges of managing a public company.

What’s best for one company isn’t necessarily what’s best for another.

Starters - Employee - Moods - Shift - Stock

For starters, employee moods shift with the stock price. I once had...
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