I posted this article because we’re planning to do the same and wanted to gather thoughts from the tech community (the financial community has commented on this sufficiently to help inform our process).<p>I thought it might help to share our motivations for eventually listing our company vs taking more VC:<p>a. The public markets force transparency. This aligns with our values.<p>b. Governance enforced by VCs (especially in the UK) is largely founder-unfriendly. There are no prefs, investor majority consents or other unfair terms in company governance when you’re public.<p>c. Secondaries - shares sold by employees or early investors - can be sold at any time, at fair market value.<p>d. Capital raising - debt or equity - as a public company comes with fewer strings.<p>e. Friends and family and supporters can participate - especially from their retirement accounts. This is really important - the wealth creation being broad has a real good-news feel. Sharing the wealth.<p>f. Trust is built with the public - I feel - more when you’re publicly listed and ‘established’.<p>The ‘downsides’ of quarterly market updates I’m sure are more intense than it feels from the outside, but I’d like to think our growth story happening in a public sphere will help build trust so when we do need more capital a broader base of investors feel confident engaging with us.<p>Thoughts welcomed.
The banks backing spotify made about as much from their "non IPO" compared to what they would have made from a traditional IPO so I don't think too many bulge bracket banks are worried about this trend.<p><a href="https://www.bloomberg.com/news/articles/2018-03-26/spotify-listing-disrupts-the-ipo-but-keeps-the-costs" rel="nofollow">https://www.bloomberg.com/news/articles/2018-03-26/spotify-l...</a><p>> Avoiding the lock-up period was a very important part of our decision to list Spotify directly, but there were also clear financial benefits.<p>This was listed as, I think, a positive but I see it as an extreme negative. Why invest in your company if you don't have the conviction that it will be worth more 3-6 months from now.<p>> Think of it this way: the bigger the first-day gain in the closing price of your newly-issued stock, the higher the “cost” of your IPO. The investors who bought shares before the market opened pocket the gain in the stock price, instead of the company.<p>I think they are right but they really have no proof that they avoided the IPO pop discount. They actually opened trading at $165.90 and closed at $149.01.<p>What's to say that if they followed a traditional IPO the wouldn't have gone public at the same price but had a bank to back stop their share price at that level. The counter argument would be that they might have sold shares lower and had it float at $165.90 but we'll never know:)<p>one other thing they mention but should be highlighted is that most companies that go public sell new shares to the public, ie they raise money. Spotify didn't, as they didn't need money. This is more common these days due to the huge amount of money sloshing around looking for returns > 4% but its still the exception for most companies that go public while still loosing money.
Article appears to be paywalled, but here's some more background info on the whole "direct listing" thing if you're not familiar (as I was not).<p><a href="https://www.investopedia.com/news/what-difference-between-ipo-and-direct-listing/" rel="nofollow">https://www.investopedia.com/news/what-difference-between-ip...</a>
Honesty I don't get why a company has to go public and gamble its future on a herd of people that they have no clue about the business and just try to make profit out of you based on speculation. Stay private and get loans. At least loan rates will not change by 1000% overnight based on some nonsense that someone wrote on his Twitter.