Chapter 9
The Initial Public Offering (IPO)
Essential Idea: Take Your Private Company Public by Selling Shares on the Open Market
Remember the dot-com era? It was a freewheeling, big-spending, high-flying time where fortunes were made and lost as companies competed to be the latest and greatest Internet sensation. For those businesses, the mountaintop was the IPO—the initial public offering. Getting to the place where a startup would go public meant that all of those years (or months, as it were) and risks paid off in one day when the founders became instant millionaires and savvy VCs saw their net worth net more.
Take, for example, Pets.com. If you don't remember the name, you probably remember its mascot, the Pets.com dog sock puppet. The talking sock puppet became a cultural icon in the year 2000. Interviewed on the Today show by Matt Lauer and the star of its own Super Bowl commercial, the dog sock puppet even became a float in the Macy's Thanksgiving Day Parade. One would think that with publicity like that, Pets.com was destined for a huge IPO and a booming business.
You would be only half right.
It turns out that the marketing wizards at Pets.com were indeed marketing wizards. But marketing is only one piece of a successful business, and certainly not enough in and of itself to carry things forward over the long haul. There are lots of other moving parts to a business that have to work for it to be successful: a valid idea, a great team, know-how, smart pricing, and much ...
