
Ask HN: Why do companies wait so long to IPO? - collinglass
I invest in small cap public companies. I&#x27;d love to invest in the startups I follow and use. What are the main reasons companies wait so long to IPO? (usually wait until they are $XX billion  company)
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troydavis
The gist is that they don't need to anymore. The entire point of going public
until about 2010 was to raise money and obtain shareholder liquidity and they
accepted tradeoffs to do so, like spending tons of time on reporting and
compliance.

It's now possible to raise basically unbounded amounts of money in private
placements, and also for existing shareholders to sell into private secondary
markets.

Here's more:
[https://www.bloomberg.com/view/articles/2014-12-02/goldman-i...](https://www.bloomberg.com/view/articles/2014-12-02/goldman-
is-helping-uber-raise-money-from-rich-people),
[https://www.bloomberg.com/view/articles/2015-03-24/private-c...](https://www.bloomberg.com/view/articles/2015-03-24/private-
companies-will-take-money-public-companies-don-t-want)

This is not investment advice.

If you want to invest in truly small cap tech companies (say, under $400
million valuation), AngelList
([https://angel.co/invest/start](https://angel.co/invest/start)) is probably
the largest market.

If you want to invest in small-ish cap tech companies of the size that might
have already been public 20 years ago (say, $400 million-$1 billion
valuation), SecondMarket/Nasdaq Private Market
([https://www.nasdaqprivatemarket.com/](https://www.nasdaqprivatemarket.com/))
is probably the largest market.

Hopefully this is obvious, but just in case: this should be a tiny portion of
one's investable assets - think less than 5% - and this asset class should be
as diversified - ie, include many positions - as any other. Otherwise, these
aren't investments, they're lotto tickets. As it is, I think
[https://www.bloomberg.com/view/articles/2017-10-09/retail-
vo...](https://www.bloomberg.com/view/articles/2017-10-09/retail-voters-and-
insider-traders) is true of late-stage startups too; an individual is very
unlikely to form a uniquely informed opinion.

~~~
collinglass
Excellent thanks for the detailed response!! :)

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yourcomplex
Back track to the dot com era and the mantra of the day was "get big fast."
Principles IPO'd and cashed out before things fell apart. While I can't speak
to the intentions of individual company's management, today's institutional
investors will likely not throw around their money on an early venture as
easily as they did in 1998. Also, the more value a company can create prior to
IPO, the more equity they can save for the original owners in the long run.

