

The Top Ten IPO Candidates For 2010 - edw519
http://www.techcrunch.com/2009/12/24/top-ten-ipo-candidates-2010/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+(TechCrunch)&utm_content=My+Yahoo

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falsestprophet
_"Why would you invest in GM IPO if you could invest in Tesla instead?"_

One reason may be that you think GM is underpriced and Tesla is overpriced.
Techcrunch ought to hire people who are financially literate if they are to
report on finance.

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dandelany
Well, technically you're right. However, GM is a massively speculative play,
and not an investment in the least. Their business has been declining for
years, they're no longer profitable, and they filed for bankruptcy this year.
They don't even trade under the GM ticker symbol anymore, they're now "MTLQQ"
(Motors Liquidation Company) ever since they went bankrupt.

The only reason you'd (or at least I'd) buy GM is because you believe their
assets are worth more liquidated than the stock price implies. Tesla, on the
other hand, shows tons of promise for actual revenue growth.

GM's 2007 high share price: ~$42. 2008 high: ~$29. 2009 high: $4.15. Currently
trades for 49 cents.

I'd say the author's point, that GM is a total stinker compared to a
profitable company like Tesla, is still correct, and shows much more financial
literacy than you give him credit for.

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falsestprophet
This is incorrect.

MTLQQ is not really GM. GM's valuable assets (the car making and whatnot) have
been transferred to a new private company that is owned by the "old GM's"
debtholders.

This "new GM" is planning an IPO in 2010. It will be a reasonably healthy
company and a real candidate for serious investors.

So if the author is talking about investing in MTLQQ, then he is totally
clueless.

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dandelany
Ah, you're right, I misread the original statement. I still think an
investment in the "new GM" will be a riskier and more speculative play than an
investment in Tesla, which is already profitable, but that's just a difference
of opinion.

On another note, your tendency to end every comment with a rudely worded ad
hominem disturbs me.

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ojbyrne
The idea of another "Netscape moment" and a "halo effect" seems like wishful
thinking to me. The internet industry has matured, expected ROI is more easily
measured, and less subject to investment hype.

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jbm
I interviewed for the Gilt Groupe about 2 years back. Got to the last
interview, but bounced over a visa problem.

I'm not sure I was ready for it at the time though. I cringe when I look at
the code I wrote back then (eventhough I had quite a bit of experience). Not
sure how it reflects on them that I got so far along in the process as a
senior developer.

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scorpioxy
I understand that companies like Facebook and LinkedIn need a lot of money for
fueling growth before they can become profitable to solve the chicken the egg
problem. But why would a company such as Etsy need 30 million dollars?

Also, is it just me or does it seem like these days creating a solid
profitable business is no longer cool?

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strlen
Why wouldn't sacrificing profit for growth make sense for Etsy?

This is also just a theory, but this could be perhaps why many web companies
choose to pursue growth over profit: if you want to attract the brighest
developers, you have to give them interesting problems to solve. A simplistic
webapp could be profitable with a small userbase, but they wouldn't have the
challenges (scalability, search relevance, machine learning for ad targeting
and collaborative filtering) that could attract a top-notch engineering team.

Entrepreneurial hackers are quite different from most business owners in their
motivations are quite different. Top technical talent usually isn't very
motivated by money alone and _hates_ being underutilized. A small (even
profitable) business wouldn't generate that much money for developers anyway.
Founders could find a way to cash out from dividends, but that would leave
employee engineers with nothing (or at the least, with nothing more than what
four years of routine bonuses at Google would bring) to show for years of
working long hours on tedious and technically un-interesting problems (which
many times still happen to be the problems that customers want solved).

A competitor could delay profitability in the short term, attracting not only
a large user base but also a talented team that could execute on a much more
scalable monetization approach (e.g. self-serve advertising vs. brand
advertising, SMB/consumer products vs. enterprise products).

Incidentally, from what I've heard, before Facebook began seeing _serious_
growth and went beyond being a simple database driven web application
(appearance of Thrift and the ability to write back-end services in Python,
C++ and Java), they had high turnover in engineering. I'd imagine the fact
that they were recruiting top talent but putting them to work on routine web
development contributed a lot to that. Of course with the scale Facebook
operates at _now_ , the simplest web development tasks are quite challenging.

That being said, companies that start out solving "unsexy" but financially
lucrative problems could grow to be billion dollar companies (e.g. SAP).
Philip Greenspun has a really interesting piece on this topic (see the third
"good reason to start a startup"):

<http://philip.greenspun.com/business/startup-tips/>

Question is, what would these start-ups have to do to attract talented
technical employees (as opposed to founders, who have the lure of "fuck you
money" or talented sales/marketing employees who are passionate about customer
building a profitable pipeline and closing valuable deals)?

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johnl
Sources of income are ad revenue and niche market consumer sales it looks
like. No surprises.

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extra
interesting that rearden got a mention and a certain other travel technology
company did not :)

