A Quote by Jay Samit
In my experience, there are only two valid reasons to take a company public: access to growth capital and investor fatigue.
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I basically see two reasons for a going public: Glencore gets access to more money. It is a way of funding your business and to finance growth. Plus: You have more liquid shares. It is easier to leave the company and redeem your shares. The 'going public' may also be an exit strategy for the top management.
The issue of access to growth capital is common to all entrepreneurs. Any entrepreneur who can demonstrate a credible business model and plan would be able to access to capital.
There are certainly valid reasons for taking a company private, and it's also possible that C.E.O.s perform better when monitored by a small number of owners in a private company rather than by the dispersed and often uninterested shareholders of a public corporation.
If you're an investor who wants a little bit more from the capital-appreciation side of things, but still likes this concept of getting 'paid by the company,' then we would tell that investor to pursue shareholder yield.
There is always a critical job to be done. There is a sales door to be opened, a credit line to be established, a new important employee to be found, or a business technique to be learned. The venture investor must always be on call to advise, to persuade, to dissuade, to encourage, but always to help build. Then venture capital becomes true creative capital - creating growth for the company and financial success for the investing organization
Growth isn't central at all, because I'm trying to run this company as if it's going to be here a hundred years from now. And if you take where we are today and add 15% growth, like public companies need to have for their stock to stay up in value, I'd be a multi-trillion-dollar company in 40 years. Which is impossible, of course.
I start with people's growth, my own growth included. I don't start with the company's strategy or products. I start with people's growth because I believe that if the people who are running and participating in a company grow, then the company's growth will in many respects take care of itself.
The standard growth theory tells us that economic growth in per capita basis comes from mainly two sources: capital deepening and total factor productivity growth, or TFP growth.
Valuation depends on several factors. From an investor angle, they look at leadership position, management, and what the company's offerings are. I think these three things got 5/5 for a company like Flipkart, and that is what is driving valuations and growth.
I do think that impact investing is not that effective. Shares go from investor A to investor B, and the company doesn't even know it. It's inevitably an ineffective way to communicate to the company your feelings.
If you're a technology investor, and you decide that you're also going to be a healthcare investor or a green-tech investor, that doesn't usually work out that well. There are reasons why people make their careers studying these things and becoming experts.
Government should stand aside and let the business community prosper instead of imposing new regulations that will only stifle growth and limit access to capital.
Nominally, I stated a company. Practically, it's a venture capital firm that allows me to be an investor in early stage companies.
Basically my point of view on unicorns is that private companies which have sky high valuations, it doesn't really mean anything in the real world until it's marked to market. And there's only two ways things get marked to market in venture capital: Either a company is acquired by another company for cash or marketable security, or it goes public, and then it has reporting requirements and then the market will determine the value.
As a serial entrepreneur, angel investor and public company CEO, nothing irks me more than when a startup founder talks about wanting to cash in with an initial public offering.
One of the difficult things in a high-growth company is that, even with the best intentions, the company moves so fast, and growth happens so regularly. When you move at that rate, you have to be willing to change, and you have to be willing to take advice.
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