The IPO process is pre-Internet and that needs to change ASAP. With the tech IPO window open we are once again being treated to the maddening spectacle of the opening pop in which the first trade price is massively above the IPO price. All sorts of theories are proffered for why that is rational and the right thing to do. It isn’t. In the year 2016 here is how a company should go public. The company, with the help of banks, brokers and the exchange should build a complete buy and sell order b...

The IPO process is pre-Internet and that needs to change ASAP. With the tech IPO window open we are once again being treated to the maddening spectacle of the opening pop in which the first trade price is massively above the IPO price. All sorts of theories are proffered for why that is rational and the right thing to do. It isn’t. In the year 2016 here is how a company should go public. The company, with the help of banks, brokers and the exchange should build a complete buy and sell order b...

There are many terrific analyses of the WeWork IPO filing out there. One thing I have not read is someone pointing out how there is a possibility that this all works, despite the hokum language and the eye popping capital requirements, simply because we have created $3 trillion more dollars in the US alone (with equally massive central bank money creation in Europe and in China). On my blog I have been complaining about valuations as far back as I can remember but when interest rates approach...

There are many terrific analyses of the WeWork IPO filing out there. One thing I have not read is someone pointing out how there is a possibility that this all works, despite the hokum language and the eye popping capital requirements, simply because we have created $3 trillion more dollars in the US alone (with equally massive central bank money creation in Europe and in China). On my blog I have been complaining about valuations as far back as I can remember but when interest rates approach...

I was going to write a post about Facebook’s valuation, but Bill Gurley has done such an excellent job, that the better idea is to point at his post explaining “Why Facebook Clearly Belongs in the 10x Revenue Club.” There is one other important point to consider in thinking about Internet company valuations in the current economic environment: low interest rates. Companies that are still growing and have a lot of room for future growth have a fair bit of their value sitting in the future – th...

I was going to write a post about Facebook’s valuation, but Bill Gurley has done such an excellent job, that the better idea is to point at his post explaining “Why Facebook Clearly Belongs in the 10x Revenue Club.” There is one other important point to consider in thinking about Internet company valuations in the current economic environment: low interest rates. Companies that are still growing and have a lot of room for future growth have a fair bit of their value sitting in the future – th...

For a moment I thought it was a typo when I saw the headline “Survey Monkey Raises $800 Million in Debt and Equity.” Shouldn’t that be $80 million? No. What’s going on? Survey Monkey essentially just provided a massive private liquidity event to its investors and employers. And it did so while staying private. Why would someone want to do that? Here is what Dan Goldberg, Survey Monkey’s CEO and Sharyl Sandberg’s husband, said to Fortune:“There are lots of good reasons for going public,” says ...

For a moment I thought it was a typo when I saw the headline “Survey Monkey Raises $800 Million in Debt and Equity.” Shouldn’t that be $80 million? No. What’s going on? Survey Monkey essentially just provided a massive private liquidity event to its investors and employers. And it did so while staying private. Why would someone want to do that? Here is what Dan Goldberg, Survey Monkey’s CEO and Sharyl Sandberg’s husband, said to Fortune:“There are lots of good reasons for going public,” says ...

I had an opportunity to buy shares in the Pandora IPO but chose not to. If I was a super active trader and had stayed on top of it I could have made a fair bit of money as the stock popped by about 60% in early trading but closed even the first day up only about 10% from its IPO price. Yesterday, only a couple of days later, Pandora is trading below its IPO price. Today the price is down a bit more. Why did I not jump on Pandora? There are two key reasons. First, I spent a bunch of time readi...

I had an opportunity to buy shares in the Pandora IPO but chose not to. If I was a super active trader and had stayed on top of it I could have made a fair bit of money as the stock popped by about 60% in early trading but closed even the first day up only about 10% from its IPO price. Yesterday, only a couple of days later, Pandora is trading below its IPO price. Today the price is down a bit more. Why did I not jump on Pandora? There are two key reasons. First, I spent a bunch of time readi...

Much of the regulation that we have in the financial markets (and other markets for that matter) predates the Internet. While there has been the occasional patch here and there, too many anachronistic concepts remain that should simply be eliminated entirely. My favorite example is the “quiet period." As even the SEC notes on their own web site, the quiet period isn’t even found in federal securities law. Instead, as this blast-from-the-first-bubble-past article from Wired describes, the quie...

Much of the regulation that we have in the financial markets (and other markets for that matter) predates the Internet. While there has been the occasional patch here and there, too many anachronistic concepts remain that should simply be eliminated entirely. My favorite example is the “quiet period." As even the SEC notes on their own web site, the quiet period isn’t even found in federal securities law. Instead, as this blast-from-the-first-bubble-past article from Wired describes, the quie...

I just woke up in Tokyo where Susan and I are visiting with our children (both as a vacation and as part of home schooling the kids). In the meantime the day is ending in the US but I still want to take the time to congratulate Chad Dickerson, Kristina Salen and the rest of the team at Etsy on the company’s successful IPO. As a New Yorker I am thrilled to be having a company of Etsy’s scale and importance here. It is also a good time to remember that many people have contributed to the succes...

I just woke up in Tokyo where Susan and I are visiting with our children (both as a vacation and as part of home schooling the kids). In the meantime the day is ending in the US but I still want to take the time to congratulate Chad Dickerson, Kristina Salen and the rest of the team at Etsy on the company’s successful IPO. As a New Yorker I am thrilled to be having a company of Etsy’s scale and importance here. It is also a good time to remember that many people have contributed to the succes...

Today our portfolio company Lending Club went public. Congratulations to the team And here is founder Renaud Laplanche on the business

Today our portfolio company Lending Club went public. Congratulations to the team And here is founder Renaud Laplanche on the business

Facebook goes public and its stock declines. Commentators write that investors should have known it was overpriced. Twitter goes public and its stock pops. Commentators write that the company left money on the table. Not nearly enough people though remark on how crazy it is that companies still go public the way they do. Three years ago I wrote a post saying that I was hoping we would see IPO 2.0 and unfortunately I am still waiting. What do I mean? Building a complete order book upfront and ...

Facebook goes public and its stock declines. Commentators write that investors should have known it was overpriced. Twitter goes public and its stock pops. Commentators write that the company left money on the table. Not nearly enough people though remark on how crazy it is that companies still go public the way they do. Three years ago I wrote a post saying that I was hoping we would see IPO 2.0 and unfortunately I am still waiting. What do I mean? Building a complete order book upfront and ...

Earlier this week I was talking to a group of investment bankers about the process of going public. In particular I was drilling in on the much vaunted need for revenue visibility as a basis for giving quarterly guidance. Every company that is thinking about going public hears this and it becomes an obsession for the team and the board. Why do you need revenue predictability? Because you need to give guidance. Why do you need to give guidance? Because the market expects it. Why does the marke...

Earlier this week I was talking to a group of investment bankers about the process of going public. In particular I was drilling in on the much vaunted need for revenue visibility as a basis for giving quarterly guidance. Every company that is thinking about going public hears this and it becomes an obsession for the team and the board. Why do you need revenue predictability? Because you need to give guidance. Why do you need to give guidance? Because the market expects it. Why does the marke...