Trace Cohen’s Post

📈 The Shift in SaaS IPOs! Janelle Teng of Bessemer Venture Partners delves into why SaaS companies are staying private longer, highlighting the rising median age of companies at IPO. Discover the advantages and challenges this trend poses for startups, employees, and investors alike. 🔗 Read the full analysis here: https://lnkd.in/e4nVmcte #SaaS #IPO #VentureCapital

Are you an active member in the startup ecosystem and want in-depth look at some SaaS benchmarks? 📊 Thanks to Blossom Street Ventures, we have created a report that features relevant metrics aggregated from publicly traded U.S. SaaS companies that IPO'd after October 2017 🚀 Take a look here >>> https://lnkd.in/geXKHpqK

SaaS founders — if and when you IPO, how much of the company will you own? Disclaimer up top, this is not Carta data and it's only 34 companies. But I still find the data collected by Jason M. Lemkin at SaaStr fascinating. A couple major points stand out: 1. The average ownership across the entire founding team at IPO was 22%.     2. The "first founder" (usually the CEO) had significantly more equity in companies with 2 co-founders (often about 2:1 ratio). Now - there are significant outliers here. The founding teams at Atlassian, Klaviyo, and ZoomInfo all IPO'd with majority ownership. Atlassian at 75.4% is an outrageous mark, kudos to them! If you remove the three high outliers, the key benchmarks look like: • 75th percentile ownership across the founders: 22.3% • 50th percentile: 17.1% • 25th percentile: 14.4% Does that feel like too much? Too little? The range is gigantic, from 75% down to 2%. Seems like every path to IPO is distinct enough that comparison is just an academic exercise. And hey, 2% of billions is still a lottery-level outcome. This concept of dilution through fundraising rounds is slippery - at first glance, it's simple. But add in the SAFE conversions, the option pools, the priced round extensions, and the exact amount everyone owns becomes hazy. So on Monday morning, I'm going to do a LinkedIn Live presentation on dilution at the early stages, including pre-seed, seed, Series A, and Series B! Market benchmarks + a little live modeling in Carta Launch to give a the numbers some real impact. Give me a shout in the comments for a direct link to the event once we open registration. You'll have the ability to ask questions in the comments as well. Here's to this damn IPO market opening back up soon, for everyone's sake 🙏 #founders #startups #dilution #fundraising #IPO -------------------- 𝘕𝘰𝘵𝘦 𝘰𝘯 𝘵𝘩𝘦 𝘥𝘢𝘵𝘢 Some of these companies may have more co-founders than listed who aren’t large enough shareholders to show up in the S-1 cap table.  For purposes of thinking about equity ratios, the focus was on identifying folks with >= 5% ownership or who were named officers or directors. Stock option grants may not be fully included in these numbers which would push ownership numbers a little higher. Data from Jason Lemkin & SaaStr | Chart by Peter Walker

If I could count the number of times I heard a VC say "I love what you're doing but we just don't invest in Consumer startups." Thanks for the reminder on why that's a huge miss Forerunner! "We live in a consumer-driven economy—consumer spending accounts for two-thirds of the U.S. GDP. Yet Carta recently reported that just 7% of seed capital raised on the site last year went to consumer companies, the smallest share since 2018. And yet... Consumer companies offer better growth rates and profit margins at IPO. Consumer company IPOs are larger. Consumer companies fetch comparable revenue multiples at IPO." https://lnkd.in/gARb-Q6W

Pre-IPO vs. Post-IPO: Picking Your Startup Winner The startup world is sizzling, and investors are hungry for a piece of the action. But should you chase pre-IPO opportunities or grab shares post-IPO? Let's break down the pros and cons of each: **Pre-IPO: High Risk, High Reward ** Early Access: Be among the first investors in a potential game-changer. Discount Potential: Pre-IPO shares might be cheaper than the public offering price. Limited Availability: Owning a pre-IPO gem can be exciting, but access is restricted. But be aware: Illiquidity Trap: Selling pre-IPO shares can be tough. You're likely in for the long haul (years) until an IPO or acquisition. Startup Rollercoaster: Many young companies don't make it. Your investment could become worthless. Information Blackout: Pre-IPO companies often share less financial data, making due diligence tricky. **Post-IPO: Transparency & Flexibility ** Liquidity Lifeline: Publicly traded shares offer the freedom to buy or sell on the stock exchange. Open Book Management: Public companies disclose more financial information, allowing for better analysis. Proven Track Record: By IPO time, these companies have a business model that's working, reducing some risk. However, remember: IPO Frenzy: The initial offering can be volatile, and the stock price might not reflect true value. Missed Discount: You won't get the potentially lower pre-IPO price. **Choosing Your Startup Champion ** Pre-IPO is for investors comfortable with high risk, long bets, and the potential for massive returns. Post-IPO caters to those seeking liquidity, transparency, and a less volatile entry point. The best choice depends on your risk tolerance, investment goals, and research skills. Consider connecting with a financial advisor to find the option that aligns with your overall strategy. #startupinvesting #preipo #ipo #venturecapital #stockmarket

Would you walk away from $23 billion? Yesterday’s big story about Wiz has many tech start-up leaders evaluating the IPO market with fresh eyes. Unicorn start-up Wiz reportedly decided to pursue an IPO, abandoning a $23 billion acquisition deal with Google in the process. The headline-grabbing decision feels like further confirmation of the brightening outlook for tech IPOs, following high-profile, successful IPOs for companies like Reddit, Rubrik, and Ibotta.  Oddly enough, IPOs may be the only viable option for companies who would likely face heightened regulatory scrutiny in the face of a combination (especially in tech). Right now, many tech company leaders are evaluating their options for taking advantage of this active IPO market where timing is essential and over-preparation is the name of the game. This October 9-10, The F Suite and The L Suite (TechGC) will partner to present "IPO Ready: A Roadmap to Success for Finance and Legal Leaders.” This conference is designed specifically to prepare CFOs and Chief Legal Officers at late-stage companies for a successful transition to the public markets. Learn more: https://lnkd.in/gAkP3C4f Back to that Wiz deal… What are your thoughts? Are the markets really hot enough to support walking away from $23B in pursuit of an IPO? 

In our endeavor to share knowledge from across the world, here is another intriguing article titled 'VCs anticipate surge in Exits in 2024: Consensus Lacking on Timing and Strategies' on the TechCrunch website. 🚀 Wondering what's in store for startup exits in 2024? Will it be the year the market defrosts? 💼 TechCrunch+ surveyed over 40 investors for their insights. 📈 While most foresee a rise in exit volume, opinions differ on M&A vs. IPOs. 🤝 Some predict a surge in M&A fueled by strong business fundamentals, while others anticipate the return of IPOs, albeit with varied timelines. 📊 Dive into the forecast and potential factors influencing the exit landscape ahead. Read Full Article: https://lnkd.in/ddZZ7Pph #StartupExits #InvestmentTrends #venturecapital #startupfunding

🚀 Top 20 Fastest IPOs of All Time 🚀 IPOs represent a pivotal liquidity event for founders and early-stage investors, allowing companies to access significant capital for growth while enabling investors to realize returns on their investments. In 2021, there were 1,035 IPOs, which increased to 1,333 in 2022, demonstrating a positive trend in market activity. However, the fluctuating landscape has led to a decline in 2023, highlighting the dynamic nature of the market. Here are the Top 20 Fastest IPOs: 1. VA Linux (Larry Augustin) – 9 months 2. Netscape (Marc Andreessen, Jim Clark) – 1 year 3. Napster (Shawn Fanning, Sean Parker) – 1.5 years 4. Yahoo! (Jerry Yang, David Filo) – 1.5 years 5. Qualcomm (Irwin Jacobs, Andrew Viterbi) – 2 years 6. Pets.com (Julie Wainwright) – 2 years 7. Amazon (Jeff Bezos) – 3 years 8. eBay (Pierre Omidyar) – 3 years 9. Box (Aaron Levie, Dylan Smith) – 4 years 10. Apple (Steve Jobs, Steve Wozniak, Ronald Wayne) – 4 years 11. Red Hat (Marc Ewing, Bob Young) – 5 years 12. Google (Larry Page, Sergey Brin) – 6 years 13. Lyft (Logan Green, John Zimmer) – 7 years 14. Twitter (Jack Dorsey, Biz Stone, etc.) – 7 years 15. Snowflake (Benoit Dageville, etc.) – 8 years 16. Facebook (Mark Zuckerberg, etc.) – 8 years 17. Zoom (Eric Yuan) – 8 years 18. LinkedIn (Reid Hoffman, etc.) – 8 years 19. Spotify (Daniel Ek) – 12 years 20. Rivian (Robert "RJ" Scaringe) – 12 years These companies have transformed industries and demonstrate the significant role of IPOs in enabling growth and rewarding early stakeholders. Do you know any company that should have been in the list? #IPO #Investing #Startups #LiquidityEvent #BusinessGrowth PS: We just created a Virtual Access Ticket Class for #StartupSouth9. Connect with Founders and Investors. Investors comment below for Free Investors Pass.

Well knock me over with a feather! A lot of Black Swans on this list - above the average % at that! It would be interesting to look at how the direct listings opportunity factored in. A few of these we launched and scaled so we did take the risk of a direct that first time without a net but then could do a few with the advantage of the US JOBS Act (protected IPO filing) and going out with a 'reference price.' Quite a few of these were Open Source valuations / dev tools plays first then scaled out from there. Founders in this space usually can command more %. Hazy out there on ownership with how filings work, shift to SPVs and SAFEs getting so much utilization for a long spell. If you haven't, sign up for Carta's Data Minute where Peter Walker slices and dices the numbers: https://lnkd.in/gGRM4c8B

You can't "bank" percentages, only the monetary value attached to the shares that those percentages represent. As I've often said to Founders there is no one right path from incorporation to exit, so outcomes will always vary. I'd love to see the binomial (bell shaped curve) distribution from a larger sample size. #IPO #exit #startups #founders #venturefunding #venturecapital #thefundraisingangel