I have no data to back this up besides trends I've happened to notice personally, but it seems that private companies with an established market and solid plan still aim for an IPO. Why is that? It seems to only abstract away the initial mission of the company to a board of directors who may not share the same goals, and lead the company towards a slow death as investors have their turn at trying to make what they can from it in the short term. Would a company like Google actually be better off now if it hadn't IPO'd and was still following it's mission?
May I ask for a clearer definition of “better off”. From whose perspective? Also does this imply that since going public, google has not been following its mission?<p>It’s certainly seems true that companies are able to survive on private funding longer than they were a decade or two ago. The longer the company stays private, the larger the IPO leads to bigger payouts for investors and employees that stick around long enough to see the liquidity event and/or have enough cash to exercise their options should they choose to leave. With a strong team, perhaps the lack of public shareholders leads them to pursue more moonshots, shut down fewer products, and find more success but I also think there are downsides.<p>Chief among them, I think, is that employees generally assume the downside of additional private funding as VCs often get to maintain their pro-rata rights (get to maintain their ownership percentage) while employees get diluted with additional funding. As private valuations rise, option strike prices increase without any guarantee of liquidity in the future. That means employees either need to stick around longer or need to pay significantly higher strike prices for their options without a guarantee they will be worth anything in the future. RSUs (basically options with a $0 strike price) are very employee friendly and many engineers seek them out as they are as good as cash.<p>As with many things it’s probably a trade off. Perhaps they stay more “true” to the mission without going public, but I would guess many google employees would have missed the wealth brought about by the liquidity from the IPO.<p>Good question. What do you think?