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by yourapostasy
2877 days ago
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I imagine there has to be a significant enough scaling difference between the capital raised by IPOs, which is a one-time event, and subsequent cash returns to shareholders in various forms, which can be characterized as interest payments on that one-time liquidity event (absent subsequent share issuances to keep this description simple) that never ends, versus a loan-then-repayment or bond issuance-then-repayment, that makes the IPO compellingly attractive. I've also heard that many leadership teams choose an IPO because it is easier and faster to raise the sums involved than going to the private markets, and when in a "move fast and break things" mode, competitors hot on your heels, that's got to weight heavily in favor of an IPO. |
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In addition to that, coming form a private equity holders perspective, its a way for some of us to cash out on the general market. If I had a big stake in a private company, maybe I can only sell my options every 6 months, if my company is kind enough to set that up.
If there's an IPO I can sell my stake at what is probably a higher market value than the internal price and cash out all at once (or over time)