Suresh Vasudevan: timing, structuring and executing an IPO
The purpose of the IPO is not what it once was. From the early 1930’s right up until the millennium, the initial public offering stood as the backbone of American capitalism.
Entrepreneurs would sell a stake of their company to investors, and use the proceeds to invest in the future of their businesses.
Apple and Microsoft for example. Both used investment raised to further evolve the Macintosh and Windows operating systems. It provided a launch pad for immense growth, signalling the start of hockey stick growth that would see both companies becoming some of the most successful in history.
Cash used towards these ends made the stock market one of the most efficient methods of delegating capital that the world had ever seen.
But with the increased proliferation of VC firms, businesses no longer have to wait for an IPO to raise capital. In 2014 VC’s invested $48 billion, a 48% increase on 2013.
This coupled with the fact that Sarbanes-Oxley regulations have made floating your company harder, combine to morph the IPO into something entirely different.
Instead, filing for an IPO for the most part can serve as a future reward. Stock options for startups can be a crucial means of bringing on board talented employees when competitive salaries can’t be afforded .
It’s the future potential of an IPO that can be so attractive to both investors and employees.
Going public is a huge deal, and this episode of the Hot Topics podcast is looking at how to time, execute and structure an IPO.
There are few people better placed to guide us through the process of floating your company than the CEO of Nimble Storage, Suresh Vasudevan.
Believing he could build a company that would be able to generate billions dollars in future revenues, in December 2013, Nimble Storage filed for an IPO. Raising $168 million at a valuation of just under $1.5 billion, Suresh is testament to the rewards that can be reaped.
To learn about floating your company, see above for this weeks episode of the Hot Topics podcast.