There was a time in the 90s when filing an IPO was as glamorous as being selected in the NFL Draft. To hear Benchmark’s Bill Gurley tell it, you could stop any entrepreneur on University Avenue and ask, “What’s your longterm goal?” and the answer would always be the same: I want to ring the bell at Nasdaq and take my company public.
And then came Mark Zuckerberg. Even though we all remember him ringing the Nasdaq bell with that cherubic grin, the Facebook CEO was among the first high-profile founders to delay going public, preferring to maintain control with limited shareholder interference and public scrunity, and to focus on product before revenue. Even on the day of the IPO, Zuckerberg said, “Going public is an important milestone in our history. But here’s the thing: our mission isn’t to be a public company. Our mission is to make the world more open and connected.”
Over the past year and a half, the anti-IPO sentiment has only intensified. First there was the post-IPO freefalls of Groupon and Zynga, and then of course Facebook’s own famously botched offering.
Now there’s a new class of SIlicon Valley entrepreneurs forsaking IPOs, best embodied by Evernote CEO Phil Libin. Last November, Libin told the Wall Street Journal, “It is terrible. Everyone I know who is running a public company is not having a good time. We just want to delay.” He went on to call going public a “morally correct.” Sexy.
But despite the recent woes facing the newly public, Bill Gurley has no patience for entrepreneurs who fear the IPO. “I’d be careful if i were Phil, running around telling people I don’t like the notion of being out there.” As Gurley did at numerous points during the night, Gurley took to a sports metaphor:
“Imagine (number one NFL draft pick) Andrew Luck coming out of Stanford saying, ‘You know, I just don’t think i’m going to sign up for (the draft). They track your metrics every game, everyone talks about you on TV… How can I possibly become a better player?’ If someone did that, they would be laughed out of the stadium.”
Gurley adds that the entrepreneurs he’s most impressed with, like Jeff Bezos, Reed Hastings, and Marc Benioff, think of the IPO as just another step along the way. In fact, nothing’s further from their mind. They’re the “RGIII”s of the startup world, unfazed by the limelight, invigorated by the challenges of performing at the highest level.
And at the end of the day, Gurley says, it doesn’t matter how many users you have or how many devices you’ve sold. The only scorecard that matters is market capitalization, which you only get if you join the big leagues.