Going Public

The news broke yesterday that Snap (fka Snapchat) has confidentially filed to go public and is aiming for a March IPO. I am very happy to see this. Snap is a great company led by a creative and ambitious founder and they have a loyal and growing use base. I think Snap can be an excellent public company. There are the obvious questions about valuation, long term growth prospects, profitability, etc. Those will determine how good of a business and a stock it will be over the long run.

But the thing that makes me happy is their decision to open up their cap table to all investors, to become more transparent with their numbers, and to follow the path taken by so many great tech companies over the past five decades.

Going public used to be a rite of passage for high growth tech companies. It was what every founder wanted to eventually do with their company. That all changed after the tech/internet bubble burst in 2000 and for the last fifteen years it has been conventional wisdom to delay the IPO for as long as possible or even forgo it in lieu of a trade sale or something else.

I appreciate why some founders want to avoid being public. I spent the last day and a half being a public company director. There are parts of that job that suck. 

But having seen this movie (going public/being public) many times now, I think there is a lot less to fear than most entrepreneurs think. It’s good for the company to be held accountable, it’s good for the employees and investors to have liquidity, and it’s good to join the ranks of the best companies in the world.

I am very pleased to see Snap going for it.


Comments (Archived):

  1. JimHirshfield

    I spent the last day and a half being a public company director.Huh? You got kicked off the board within 36 hours of joining the board?

    1. Paul Robert Cary

      That’s the Snapchat version of being on the board. 🙂

    2. fredwilson

      Not exactly

      1. Richard

        A Snap IPO should lead to Snap snapping up Foursquare.

  2. JimHirshfield

    Do you think there’s a rush to get IPOs done before Trump takes office? #uncertainty

    1. fredwilson


    2. karen_e

      Interesting question.

    3. Pointsandfigures

      No. The President makes no difference. The regulation does.

  3. JimHirshfield

    WHERE IS EVERYBODY??? This post was published 10 minutes ago. #IHateToDrinkAlone

    1. William Mougayar

      There is a 20-30 min delay between the email notification and the actual posting on the website. You can only get to it by clicking on the email link, until it becomes available (which some have figured out).

      1. JimHirshfield

        …’cause Fred needs 20 to 30 minutes to brace himself for the onslaught of comments?

        1. jason wright

          Let slip the dogs of war.

          1. JimHirshfield

            We’re a civil community….’cause politics is not being served.

          2. jason wright

            politics is indivisible from economics, arts, sciences, society……..’socially liberal, fiscally conservative’ – more of the second means less of the first.

      2. fredwilson

        I am not sure what is causing this delay I am well aware of it

        1. Vitor Conceicao

          Could be some kind of caching/CDN issue.

          1. fredwilson

            for sure. if i was willing to spend the time in my WP instance i could figure it out.

          2. LE

            FYI – Links on gothamgal have been down all day returning 404 errors.

    2. LE

      I just thought of something (that is as funny as if you had said it). What if they had been called “Snatch Chat” instead?

      1. JimHirshfield

        I don’t say things like that. The soon-to-be ruler of the free world does, tho.

        1. Girish Mehta

          “ruler of the free world” – hmmm….contradiction in terms ? Are free people ruled ?#Englishcomment # notapoliticalcomment

          1. JimHirshfield


          2. jason wright

            …by example?

        2. LE

          Now now, take the award graciously.

          1. JimHirshfield

            I’d like to thank all the commenters that have helped me achieve this distinct honor, especially LE for his unwavering support and consistent up voting.

    3. Twain Twain

      I’ve been on Albert’s blog post on Uncertainty Principles, Quantum phenomena and I added Monty P’s ‘Dead Parrot’ sketch to it.It’s a nerd insiders’ joke to do with Schrodinger: is cat/parrot dead /+ alive?Wishing Snap IPO well because already the tech pundits are comparing Spiegel vs Zuckerberg to Jobs vs Gates.That may enable Dorsey & TWTR to escape comparisons with Zuckerberg & FB, and negatively so.

    4. Joe Cardillo

      I just got here. Are you all drunk already? How many do I need to catch up?

      1. JimHirshfield

        Let’s see…3 drinks per hour…times 6 hours…that’s 36 drinks, amirite?

        1. Joe Cardillo

          Ah that is siesta time… *slinks away to return for evening session*

  4. awaldstein

    In concept I applaud this.Been 9-10 years since I was actively involved in taking a company public and managing it through the transition but did do 3 prior.It’s complex and a pain in many respects.Great CFO operations teams are a must.

    1. PhilipSugar

      It dates me but I long for the days of the early nineties when investment banks like Alex Brown took companies like Quicken public when they were small.

      1. awaldstein

        Doesn’t date you at all!Alex Brown took us/Creaf public in that time period and we were tiny actually. We didn’t stay that way but it bankrolled our growth.

      2. Joe Cardillo

        I wonder if we’ll see a shift post-brunicorn where investors will move back to preferring that model.Not having gone through the IPO process, I’m a bit out of the loop…but just watching tech ecosystem last several years it seems like smaller, faster, more iterative is a good way to avoid biffing it as a startup.

        1. PhilipSugar

          As I said it does date me, and I do wish for the old model.

  5. William Mougayar

    Flashbacks of your Upfront summit emotional eruption on stage, re: Uber going public :)http://swf.tubechop.com/tub…

    1. Girish Mehta

      See Bill Gurley’s comments below. Not being critical here quoting him in 2015 vs 2016, have respect for somebody who can be publicly flexible (with reason like he does here). Its a nuanced question.Gurley quoted on IPOs in 2015 –“ Until you get liquid, you haven’t really accomplished anything” and “If you’ve got a CEO saying they won’t go public, you should be using a 70% or 80% liquidity discount,”http://fortune.com/2015/10/…Whereas in 2016 on the question of a Uber IPO, listen to his response here. At the 2:40 mark.http://www.bloomberg.com/ne…And here -http://www.businessinsider….”Where you stand depends on where you sit”. (Miles’ law / Mandela).

  6. Vitor Conceicao

    Its good to finally see some unicorns moving into becoming public. It is good for the market and good for the companies.Its great to have those companies opening up information about their business and having the market validate them.But there is also a downside to this, public markets are still too much short-term focused and, unless the company has a strong minded CEO and is executing very well it can end up being led by short term minded investors.I would love to see some disruption on public markets where someone creates some kind of structure that enables companies to go public but penalizes short term investors so that they can’t hijack those companies.

  7. Tom Labus

    and good for realistic valuations that allow for future growth.

    1. Pointsandfigures


  8. TeddyBeingTeddy

    I really wanted to dislike Spiegel. When his emails were hacked and leaked a couple emails to investors…I couldn’t wait to find evidence of an entitled arrogant jerk that had no idea what he was doing. But when he said something along the lines of “at some point this needs to be a real business, make profits…” I immediately had a ton of respect for him. Not sure if his father surrounded him with the right people and he was groomed for it, or if he was just born with it…but when I saw that email I realized he was destined for great success, and that Facebook should be worried.

    1. TeddyBeingTeddy

      By the way, when the frat emails were leaked – those were INCREDIBLY tame relative to almost any other frat email chains. Only at Stanford would a guy like that be the social chair. In our house, he would’ve been the IT guy or the test files guy.

    2. LE

      arrogant jerkThe other side of this, which I am sure people will take issue with, is that sometimes it might take an ‘arrogant jerk’ to make hard decisions and do what is right for the company when things are not going well.

      1. TeddyBeingTeddy

        takes one to know one?? just kidding. You’re probably right. But life’s too short to deal with arrogant jerks in my opinion. There’s a thin line between being a jerk and having conviction. I like to err on the side of caution and avoid people that think they’re always right. But if he makes me 10x I won’t care about that stuff anymore.

        1. LE

          I don’t see an ‘arrogant jerk’ as someone who always thinks they are right. I see it as someone who, as the saying goes, who doesn’t suffer fools and/or doesn’t tolerate 2nd rate behavior or effort.In going around in the world I see many instances of ‘shitty’ lack of effort ‘not my job’ attitude or substandard hide behind big corporation poor quality. Or excuses.An example today is a typical email that I received from a company that I deal with where the return address is ‘donotreply@’ and there is no phone number or easy way to contact the sender of the letter. And if you write to the help address or to the company you are lucky to get a real person and a response anytime soon. (So people stop even trying).What an ‘arrogant jerk’ often does could be to get rid of people who are coasting and not putting in effort and thinking ahead of the needs of the end user or customer, whatever. To me there is value in the fear that you will suffer consequence of not doing your job right and to a high level.Let me give you an example. As I’ve mentioned my stepkids job is to clean the kitchen floor before I get home.. Something that I ‘dictated’. A few nights ago it was dirty and the kids were out with mom. When they got home I asked why the kitchen floor was dirty. They said ‘well mom took us out and…”. So I said “don’t give me that you have to think ahead I don’t want any excuses”. (They had plenty of time after they got home from school, maybe 3 or 4 hours in which they played on the computer). The next time it didn’t happen. They learned to think ahead and not make any excuses because they know it wouldn’t matter to me the only thing I cared about was that the job was done the right way and on time.

          1. TeddyBeingTeddy

            I think the sender of that email probably read 4 Hour Workweek. AKA putting in the least amount of effort has humanly possible. Tim Ferriss is bad for customer service, and I don’t mean Bad in a Michael Jackson sort of way. Based on your defense of jerks I’m guessing you get called a jerk a lot, but that’s ok because you’re probably doing very well and happy overall. Warren Beatty once said “I get slapped a lot, but I get F#&’d a lot too. Tradeoffs.

          2. LE

            Well not really ever called a jerk actually. But I think that people will perceive me as a pain in the ass that holds their feet to the flame.Here is a small example. When I moved into the condo building that I am in now (work condo) I asked a slew of questions and the management company was really bothered by all of the things that I needed prior to buying. Lot’s of work for them. As if it had never been done or asked of them before. (I find this is quite common with requests that I make). I then became a member of the board and the other board members also thought I asked many questions and raised all sorts of issues that they didn’t think were important (example “why is there no audit done yearly at this building?”). Or “send out the financials before the meeting don’t give them out at the meeting”. Common sense stuff I thought. Well after some time they began to see that I was right in what I did and now the same people and person who thought I was a pain before (the management girl and others) now talks to me directly and gets my approval (and advice and ideas) on everything. She almost doesn’t even bother many times with the other board members. They just say “whatever LE says is fine with us” (I am guessing). So I didn’t back down. An in the end what started as an irritation seems to have turned into respect. By the way when I made my original requests I am always nice as long as the other side is nice. I don’t go in heavy unless I need to. Obviously. And even then I don’t get angry or anything I just flood them with logic and don’t give up.

          3. TeddyBeingTeddy

            The squeaky wheel always gets the grease! Just kidding, good to have someone that cares on a condo board. Biggest PITA job ever, no comp, no appreciation, no participation. You don’t sound like a particularly fun boss, but you’re probably effective and get the job done well!

          4. LE

            You don’t sound like a particularly fun bossCorrect. @philipsugar is a fun boss from what I have been told.Biggest PITA job ever, no comp, no appreciation, no participationActually, it’s my idea of fun (really)!

    3. jason wright

      Write emails based on the expectation that they will be hacked.

  9. Pointsandfigures

    Happy about this too. Let’s repeal Sarbox and Dodd-Frank so we can have more of this. Going public is a pain in the ass, and it’s even worse today than it was in 2002. Triple accounting costs for starters. However, the transparency that comes from going public is good. The fact shareholders can weigh in, and hold mgmt feet to the fire is good. The fact that all investors, big and small have a chance to invest in a growth company is good.With the automation in exchange technology, we aren’t beholden to a group of humans to constantly update and make markets. The world has changed a lot since 2000, and the financial world is going to rapidly change in the next ten years again.

  10. LE

    They are all ‘growed up’ in their message from the home page, this changed from essentially nothing (just an icon) prior to the rebrand:… https://uploads.disquscdn.c

    1. Joe Cardillo

      That must have been a fantastic branding session to listen to! Cameras, wow.

  11. Val Tsanev

    I am also glad that Snap is going public. Not only by going public executives are held accountable but also valuations adjust and correct. I do feel that the big “unicorns” are waiting too long to go public and are doing a disservice to the startup and investment communities. I have said it in the past companies like Uber will get destroyed in the public markets, their valuations I mean…

  12. LE

    Having children and stepchildren that range in age from 12 to 24 (and seeing firsthand what they and their friends are into on any given day) I am not sure I would put long money into this IPO given their business model. [1] [2] Ideas like snapchat are ephemeral unlike an IPO like Twilio.So I guess one of the things that companies have to consider when going public is how many years are potentially left on the machine that keeps interest level and engagement high before the target user age group moves on to some other shiny ball. Always possible that they can morph into something else and/or acquire growth but at the core they are chasing the same ad dollars that everyone else is that is entirely dependent on the whims of a fickle public. (And you can’t spend or trade marketing or sales dollars to acquire new users either).[1] And that’s exactly why it’s a good idea that they went public.[2] All of them use snapchat currently

    1. TeddyBeingTeddy

      Myspace was cool with Gen X until Facebook came along and captured gen Y. Facebook is cool with Gen Y, which is exactly why it isn’t cool with the millennials. Snapchat is cool with millennials, and I’m sure something will creep up with [Millenials – 10] that will hurt snapchat. Such is the cycle of “cool” apps that essentially waste time and kill productivity.

      1. jason wright

        The digital hamster wheel keeps on turning…

    2. Joe Cardillo

      It’s a marketshare game to be sure… that is a very specific kind of thing, and it requires being able to see where to pull the trigger, which is a ton harder than people realize Whether you love or hate Zuckerberg… how many people could do what he and his team have done.

  13. Pete Griffiths

    And the Lakers are doing great.Go LA.

  14. Chris Phenner

    I love me an Over/Under Wager on these topic.Now: I have read AVC’s Terms of Service recently, and I am not trying to place a wager with anyone, but what I AM curious to hear is what AVC readers think is the right ‘Mark’ for an Over/Under Wager, as measured by ‘Day One Public Valuation.’Question: What Day One Public Valuation is the best Over/Under Mark?$20bn?$25bn?$30bn?$35bn?$40bn?I’d embed a Twitter poll if I had the time/chops; let me know what you think is the ‘Mark,’ or if you don’t know, how you would arrive at setting a Mark.

  15. jason wright

    The timing of the Snap Specs announcement now has a new context.

  16. Adam Sher

    This would be good if Snap is profitable pre-IPO. Selling unprofitable companies to the public seems like transferring wealth from the public and increasing risk to the public.

  17. popbijoux

    Let’s hope for the best.I have a bad feeling about this IPO. It’s cool tech folks think this company is worth 20B. I am not sure the public markets will agree. It’s obvious why they are IPO’ing fast. It’s going to be downhill from here.If you read any and every digital media news site or publication there MASSIVE pushback against snapchat. The stats they give out don’t seem to match the very high prices they charge for their advertising. There is a lack of clarity, or a lack of belief in this company that would indicate that the moment an alternative to Snapchat comes along, ad $$$ will bolt, fast. Why would advertisers choose Facebook over Snapchat considering that the Facebook audience is less “desirable”? Because Facebook knows on what side their bread is buttered. Snapchat has been riding on a level of momentum that will end. It always does. And when luck moves on, THAT is when you’ll find out what the company is all about. If the stories about their siloed culture and inability to hold on to management hires are true, this does not bide well for a solid future.The zeitgeist has changed massively since they first released their eyeglasses/camera product, I am not sure “fun cameras that cost $130” will be sold among the wider population of non-private-school-kids, especially if adults think it’s cool.This IPO might go to history as the last call of the Unicorn era. If this fails it will make it harder for more conservatively priced companies to go public. But hey let’s hope for the best. I might be projecting my own post-election wake-up-call-ism onto this.

  18. howardlindzon


  19. george

    My theory: the shift away from going public early really relates to a cultural and social transformation – new virtues and values influenced by the growing number of millennial entrepreneurs. This demographic is incredibly bright, unconventional and they really don’t view the market in the same way – Markets and Money clearly do not solely define their measure of success; it’s rather more about creating something profound and having a great experience. The rules are changing in every fashion…

  20. Nidhi Mevada

    FB is new orkut, Snap is new FB. Snap is less addictive and more secured den FB

  21. Jeff Robinson

    “I think Snap can be an excellent public company.” What is your criteria Fred for what makes an excellent pubco?

  22. jason wright

    Why file confidentially?