Ipo Related Quotes

Whether you’re a tiny start-up seeking angel money, a growing company going for a B round, or an IPO candidate, a POV will be the best investor relations tool you’ll ever have.

Nike, Microsoft Amazon and similar companies went public relatively early in their growth cycles. As a result, public investors had the opportunity to participate in 95 to 99% of their overall price appreciation. Founders, early employees and VCs took all the risk. Most of the reward was left for grabbing – anyone could’ve bought those stocks on the secondary markets.   As the Federal Reserve prints more money and interest rates remain low, an increasing percentage of capital is flowing into risky asset classes like venture capital and “angel investing.” This capital has chased up valuations in the pipeline preceding IPOs, making the IPOs feel more like the end of the journey, not the beginning. Thus,

In relative valuation, you price an asset based on how similar assets are priced in the market. A prospective house buyer decides how much to pay for a house by looking at the prices paid for similar houses in the neighborhood. In the same vein, a potential investor in Twitter's IPO (initial public offering) in 2013 could have estimated its value by looking at the market pricing of other social media companies. The three essential steps in relative valuation are: Find comparable assets that are priced by the market; Scale the market prices to a common variable to generate standardized prices that are comparable across assets; and Adjust for differences across assets when comparing their standardized values. A newer house with more updated amenities should be priced higher than a similar-sized older house that needs renovation, and a higher growth company should trade at a higher price than a lower growth company in the same sector. Pricing can be done with less information and much more quickly than intrinsic valuations, and it is more likely to reflect the market mood of the moment. Not surprisingly, most of what passes for valuation in investment banking and portfolio management is really pricing.

Throwing even more fuel on this fire was Alibaba’s record-breaking 2014 debut on the New York Stock Exchange. A group of Taobao sellers rang the opening bell for Alibaba’s initial public offering on September 19, just nine days after Premier Li’s speech. When the dust settled on a furious round of trading, Alibaba had claimed the title of the largest IPO in history, and Jack Ma was crowned the richest man in China. But it was about more than just the money. Ma had become a national hero, but a very relatable one. Blessed with a goofy charisma, he seems like the boy next door. He didn’t attend an elite university and never learned how to code. He loves to tell crowds that when KFC set up shop in his hometown, he was the only one out of twenty-five applicants to be rejected for a job there. China’s other early internet giants often held Ph.D.s or had Silicon Valley experience in the United States. But Ma’s ascent to rock-star status gave a new meaning to “mass entrepreneurship”—in other words, this was something that anyone from the Chinese masses had a shot at. The government endorsement and Ma’s example of internet entrepreneurship were particularly effective at winning over some of the toughest customers: Chinese mothers. In the traditional Chinese mentality, entrepreneurship was still something for people who couldn’t land a real job. The “iron rice bowl” of lifetime employment in a government job remained the ultimate ambition for older generations who had lived through famines. In fact, when I had started Sinovation Ventures in 2009, many young people wanted to join the startups we funded but felt they couldn’t do so because of the steadfast opposition of their parents or spouses. To win these families over, I tried everything I could think of, including taking the parents out to nice dinners, writing them long letters by hand, and even running financial projections of how a startup could pay off. Eventually we were able to build strong teams at Sinovation, but every new recruit in those days was an uphill battle. By 2015, these people were beating down our door—in one case, literally breaking Sinovation’s front door—for the chance to work with us. That group included scrappy high school dropouts, brilliant graduates of top universities, former Facebook engineers, and more than a few people in questionable mental states. While I was out of town, the Sinovation headquarters received a visit from one would-be entrepreneur who refused to leave until I met with him. When the staff told him that I wouldn’t be returning any time soon, the man lay on the ground and stripped naked, pledging to lie right there until Kai-Fu Lee listened to his idea.