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Comment by chrisco255 | Hacker News Reader

Exactly, no one wants the additional overhead, requirements, and legalities that go along with going public.

That might be a good thing. I'm still not convinced that a lot of these high-flying "unicorns" are really worth their valuations in a meaningful way. If Uber were to go public today, they'd immediately switch from "startup cutting legal corners" to "entrenched corporation doing illegal-ish things". Pulling back the covers of their financials is one thing that would bring an outcry of how much money they make off the backs of people that they dump liability onto.

The overhead, requirements and legalities are there for a reason. If you've raised $10b, you can afford the overhead dollar amount; but can you afford the visibility?

Not entirely true. IPO as a process exists to allow companies to raise money from the public, especially when private funding is not available. Overhead, requirements and legalities are a side effect, and if you have any money in a public market (like 401(k) in US), you absolutely want that. I do.

When private funding is available, IPO is not needed by definition. And since comp structures are set up with the expectation of IPO or exit, it's employees who are affected.

If you are negotiating an offer with a private company, you should attempt to price the risk of having to forfeit your stock comp. This risk has increased recently (that's what this story is about) but most people still under-negotiate it in their offers.

It's more than just overhead - going public forces you to think in terms of quarterly earnings reports.

It's very hard for a tech company to thrive in that kind of environment - capital expenditures required to develop new products or enter new markets will often not be profitable for several years, and getting the public market to understand that is impossible.

Focus on quarterly numbers is a side effect, which is unfortunate. You go public not because you want to report quarterly. You go public because you want public funding and potentially better terms than private funding.

So public markets essentially make long-term thinking impossible?

Well, that's overly binary; it creates strong pressures to focus on short-term results rather than making long-term thinking impossible. (If enough of your stock is held by arms-length investors interested primarily in maximizing short-term returns, it could become impossible for management to manage based on long-term thinking where that conflicts with perceived near-term optimality -- since they will be replaced if they do -- but most IPOs don't actually produce that kind of distribution of stock.

Come on, capital expenditures to develop new products or enter new products have been a part of business since forever, and indeed the cost to develop a new product for a traditional company (say, a car company) is probably orders of magnitude higher than the cost to develop a new pure-software product.

I mean, is there some kind of truth that it's harder for public companies to do ultra-long-range moonshot stuff? Maybe. But the idea that this is what's keeping Uber or AirBnB or Palantir from going public is ridiculous.

Yeah, it really sucks to be forced to act like a grown-up, real company spending money on oversight and compliance. Much more fun to just buy pingpong tables and keep the beer kegs full.

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