Everyone’s Going Public
Uber is now valued at $40 billion, and venture-backed startups such as Hortonworks have raised hundreds of millions of dollars in public offerings. Given all that heady liquidity, it’s tempting to say that the tech industry is headed for a repeat of the infamous dot-com bust.
But today’s tech industry is generally held to a higher standard than it was 15 years ago. Lew Cirne, CEO of New Relic, recently declared that we’re collectively “in the golden age of software.” Moreover, founders these days have a better understanding of venture capital, and its potential impact on a startup; they’re more interested in ensuring the business can stand on its own two feet, in terms of revenue and growth. Add to this so-called “Big Data” fueling smarter business decisions, particularly in the realm of e-commerce, and it’s clear that the situation out there is nothing like the 1990’s.
While there are the obvious outliers to this equation, even companies such as Twitter, which started out without a plan or path to monetization, have begun building out business units and creating profits. Companies such as Box, recognizing that their current valuations won’t withstand market scrutiny, have delayed going public; initiating an IPO only when it makes sense for both the company and the market is what differentiates today’s technology companies.
Having absorbed the lessons of the last dot-com boom and bust, companies are making more educated business decisions about financing and IPOs.
Till next month,
Image: Chaiyapak Mankannan/Shutterstock.com