Do these ideas seem familiar?
- It’s harder than ever to have a technology IPO.
- Private markets are removing the need for IPOs.
- Only big companies can go public now because of the high costs.
The media is filled with misperceptions and oversimplifications about IPOs.
On April 4, from 4-6 p.m. at the Rosewood Sand Hill, Menlo Park, Wealthfront is presenting a distinguished panel of Silicon Valley experts to give founders and CEOs the other side of the story. The conference will include expert views on why IPOs matter, why the difficulties of being a public company have been overblown, and how companies reach the IPO stage. You can apply for an invitation at http://thinkipo.eventbrite.com/.
The conference is part of Wealthfront’s ongoing series of education seminars in Silicon Valley. The seminars cover topics including investing well, lean startups, IPOs, and acquisitions.
Date: Wednesday, April 4, 2012
Time: 6:00pm – 9:00pm
Location: Rosewood Sand Hill, Menlo Park
Invitation & Agenda: http://thinkipo.eventbrite.com/
- Sameer Gandhi, Partner, Accel Partners
- Ken Goldman, CFO, Fortinet
- Bill Gurley, Partner, Benchmark Capital
- Jeff Jordan, General Partner, Andreessen Horowitz
- Doug Leone, Partner, Sequoia Capital
- Tony Zingale, Chairman & CEO, Jive Software
Panelist bios at http://investing2012.com/bios.
Panels are moderated by Sarah Lacy, Founder of PandoDaily, and Ari Levy, Technology Reporter for Bloomberg Businessweek.
Opening by Frank Quattrone, Founder & CEO of Qatalyst Partners. Closing by Andy Rachleff, CEO of Wealthfront and co-founder of Benchmark Capital.
Audience: CEOs and founders of fast-growing companies on the IPO track.
Preview the issues this event will focus on by watching Great Perspectives on Tech IPOs, recently released by Wealthfront and featuring Eric Schmidt, Executive Chairman, Google; Bill Gurley, Partner, Benchmark Capital; Ben Horowitz, Founder & General Partner, Andreessen Horowitz; and Frank Quattrone, Founder & CEO of Qatalyst Partners.
Notes on the IPO market from Wealthfront Research
- Only big companies can go public now. False. Bill Gurley, for instance, suggests that companies with revenues of $40 – $100 million are large enough to launch an IPO. Here’s just one example: Jive Software, whose CEO is speaking at the conference, had $77 million of revenue in 2011, the year of its IPO.In addition, Congress is working on legislation to make it easier for small companies to go public, and as of this writing the JOBS Act was expected to be signed by President Obama in the next few days. (Here’s a good post and slideshare on the Act.) Congress moved unusually quickly to pass the legislation for the same reason that smart companies should aim for IPOs: growth. The private-sector IPO Task Force, which issued recommendations to Congress, found that more than 90% of a company’s growth occurred after the IPO.
- It’s harder than ever to have a technology IPO? False. In 2010 and 2011, there were 73 technology IPOs, with an average offer amount of $196 million. While that doesn’t approach the level of the 1990s’ IPO boom, this year is expected to be a banner year for tech IPOs, led by, of course, Facebook. Here is a slideshow that lists 11 tech IPOs slated for 2012. The market goes up and down, of course, but this week alone was a great week for IPO stocks. LinkedIn (LNKD) and Jive Software (JIVE) were both trading at more than twice their IPO prices. Yelp (YELP) hit a post-IPO high, and Zynga’s (ZNGA) stock price was up 22% since its IPO.
- Private markets are removing the need for IPOs. Not really. Companies are waiting longer to go public, and that change has been aided by the rise of private markets like SecondMarket. But nothing can replace the role of the public stock market. Private markets are exclusive and open only to high-net-worth individuals, in contrast to the public equities market. The public markets not only allow companies to raise more capital when they need it, they give companies a boost of credibility. “You’re taken more seriously,” Ben Horowtiz told Wealthfront interviewers. “People say, ‘We know what your financials are like.’”