If we applied today’s IPO standards to yesterday’s most successful IPOs, what would it mean for the technology industry? This Viz from IPO Dashboards shows the grim tidings for early stage venture capital.
About this Viz
By today’s minimum standards for taking a technology company public (roughly: “you must have annual sales of $100 million and be profitable”), the majority of today’s most successful companies weren’t ready to go public until well after their first decade as a business.
The reference lines divide the visualization into quartiles: Upper 25% | Median | Lower 25%. The data show that: 25% of today’s most valuable software companies took 13 years or more to reach $50m in sales; 50% took 9 years or more; 15% took 5 years or less.
Compare this to the term of a typical early stage venture capital fund (10 years). The vast majority of today’s most successful software companies wouldn’t have been ready to go public within the 10 year window of an early stage venture capital fund.
