IPOs Just Aren't What They Used To Be

clipped from www.avc.com I spent the day yesterday with VCs from other firms. I heard two stories about IPOs that are worth sharing. One VC told me a story about a failed IPO for one of their portfolio companies a few years ago. He told me the legal and accounting bill they got after the IPO was pulled was $3.5mm. Yup, $3.5mm for an offering that was not successful. The second story has a happier ending. It was about an IPO of a company that happened recently. The company was able to get public. It has revenues of almost $100mm a year and is profitable. The company raised about $75mm in the offering. And it is now trading at a market cap of around $300mm. That is a lower valuation than the company would be able to get in a late stage private financing in my opinion.

Original content Bob DeMarco, All American Investor