Posts tagged: private

How the 2017 Tech Bubble will blow

By , January 8, 2017 6:03 pm

Exorbitantly overpriced, yes. Some are not even break-even yet, yes.

The 2017 Tech Bubble however differs from the 2000 dot-com Bubble in one thing: Funds are not pressing Unicorns to IPO.

The most successful recent IPO was Facebook. Facebook senior managers knew exactly what the firm should do. The business model has already been there, advertising platform and suppliers have already been there. Whenever the BOD presses, the firm tweaks its ad and generate abnormal revenue while keeping operational expenses incremental.

Facebook post-IPO. This was Goldman Sachs’ game not moms and pops’.

But most other firms are not that lucky. Some retain their business models ‘promising’. Some are solving further-arching physical, geographical, operational, political problems.

Tech firm went bust in 2000 under mercy of the public stock market. In 2017, VC and PE funds are keeping Unicorns private to avoid just that. A PE party to which public mutual funds have yet been invited.

Who are looking forward to IPOs when neither the co-founders nor funds managers are in a hurry? Employees with ESOP under their belts.

The 2000 dot-com burst was public market correction. The 2007 GFC was partially financial engineering. The 2017 game is corporate governance engineering.

IPOs now are more for hatching celebrity plus savior like the kind of Elon Musk than evolutionary.

For the entrepreneur: what type of fund you want to work with

By , July 5, 2012 8:48 am

Stage Type(s) of investor relevant to you What you should ideally have had General goal
Seed Angel investors
  1. Business plan (at least with business model, product development plan, marketing & sales plan, pricing structure, KPI forecast, risk management plan, industry analysis, key member details of skills)
  2. Co-founding team
  3. Incorporated
To develop products
Early Venture capitalists Working products
  • To market the products
  • To develop business
  • To scale the business
Growth Private equity funds Profit To become (a) market leader
Pre-IPO Mutual funds IPO roadmap To raise fund from the capital market for sustaining growth
Post-IPO Mutual funds, hedge funds, ETFs … More projects for growth To sustain growth
Going private LBO funds LBO plan To grow in private
Turnover Turnover funds
  • Turnover plan
  • Restructuring plan
To turnover the business

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