Many entrepreneurs still dream of “going public,” making billions of dollars, and playing with the big boys. They don’t realize that this option would likely be their worst nightmare, since it costs millions for the road show, usually dilutes your equity to a tiny fraction, and takes away all your entrepreneurial control. Consider the recent example of Facebook and Mark Zuckerberg.
Even though the Initial Public Offering (IPO) alternative for a successful startup seems to be coming back into vogue, it is relatively rare. After a record low of 39 U.S. IPOs in 2008, the market was up to a still trivial 159 in 2011. Even in most of these cases, the original startup founders were pushed out, or heavily supplemented, with “experienced” executives.
To read the original article: Startup Professionals Musings: An IPO Exit Strategy Puts the Entrepreneur at Risk
