> Founded in 2010, Stripe is middle-aged by Silicon Valley standards, but Mr. Gaybrick and Stripe president John Collison said it had no plans to go public.
Why doesn't Stripe want to become a public company?
Why doesn't Stripe want to become a public company?
It’s a question of whether you want to discount your own risk or hold it. IPOing allows you to price your risk and sell some of it off. But if you’re a long term investor there’s a good chance you value your risk higher than the market, which means you’ll lose money in the long term by selling it.
It also depends on your other investment opportunities. If you have other places to invest, then your money has a high time value and you’re paying more “interest”, so-to-speak, on the risk. If you don’t have anywhere better to park your money then the time value is very low and holding that risk is cheap.
There are other factors as well, like government limits on buying other assets, that could make a private investor want to hold.
https://www.wsj.com/articles/the-ipo-shortcut-a-direct-listi...
> Slack Technologies Inc. is set to go public on Thursday using a nontraditional process called a direct listing. Only one other big company, Spotify Technology SA, has gone public in this way.
If you do not need to raise money there are limited reasons to go public, however you have much stricter reporting requirements, and general things you cannot do anymore since you are publicly traded, not to mention hostile takeovers, etc. Dell's story is a great example why you want to go public / go back private.
https://www.forbes.com/sites/connieguglielmo/2013/10/30/you-...
Sure it does. You can't do an IPO in a day. A company starting the process now risks having the recession start before the IPO goes live.
From what I've seen Stripe mostly has customers that are selling non-essential services and luxury goods. They'd be far more likely to suffer during a recession than Visa. I mean, Visa does around 1,700 transactions per second on average [1] and handled over 2 trillion dollars in a single quarter last year [2]
[1] https://hackernoon.com/the-blockchain-scalability-problem-th...
[2] https://www.digitaltransactions.net/visa-surpasses-2-trillio...
My main question then is how do you create liquidity for employees? Unclear if these rounds include secondary offerings for employees.
An IPO would have been one way to fund it, but likely would have involved a lot of financial scrutiny along the way, which would probably distract them from the main point of raising the funds.
A bold move which will hopefully work out for them and not overvalue the company before they attempt to go public later on.