I.P.O. or Direct Listing?

October 03, 2019 | Sam Rook


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Are companies leaving money on the table?

If you are a founder of a company and you are thinking about a future public offering of your shares, you have likely been told that an Initial Public Offering ,or IPO, is the only way to go. What if there was a different way to unlock some value, allow early investors and employees to finally be rewarded for their efforts AND for you to possibly get a better price?

 

I was first introduced to this idea when Spotify went public last year. Rather than sell shares from company coffers in an IPO, they just turned all their privately held shares into public shares using a process called Direct Listing. Slack Communications did the same thing this year, listing their shares directly in New York.

 

That begs the question, why should you consider a Direct Listing over the standard Initial Public Offering? To help answer that question, I think you should listen to this podcast by Patrick O’Shaughnessy with Bill Gurley, General Partner of Benchmark Capital. It is a comprehensive breakdown of both methods of going public and well worth the time.

 

 

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