Selling Out Instead Of Going Public: The Choice Of A New Generation

from the who-needs-an-IPO? dept

Years ago, I was having dinner with someone who had started two very large companies: one of which he sold for a lot of money and another which went public. I asked which process he enjoyed more and he looked at me as if I asked him if he enjoyed flying coach or preferred his own airplane (perhaps an accurate result from the two). All he said was "I made a lot more money going public." Of course, going public isn't always so easy, and some VCs are beginning to realize that it may not always be the best way to cash out of their investments. So, these days, it's no longer considered a failure (as it might have in the boom years) to simply sell your company to another. In fact, that's looking like an increasingly attractive option for companies who realize that the IPO process can be a painful one -- and that a buyout has the potential to let you cash out faster. Of course, the problem with that thought process is it often leads to more companies that were built to flip, rather than built to grow. If the focus of the company is just to sell out to another, they don't tend to be the greatest companies. A company should be attempting to build the best possible company, and then evaluate what options it has. If it's being built to flip, shortcuts are often taken, and the companies fail to plan for the long term -- which any truly successful company needs to do.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Sponsored Promotion
Public Money, Public Code - Sign The Open Letter at publiccode.eu
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.