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.