Why an IPO is NOT an Exit Strategy, And How to Plan for It

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Posted: April 26, 2012 | Modern Marketing

Recently, OpenView Labs invited me to be a guest blogger on their site. They do an excellent job of sharing expertise, actionable ideas and approaches for building expansion stage companies.

My contribution to OpenView Labs’ praiseworthy mission was to write a blog post on a topic that is near and dear to my heart (actually, it is also kind of a pet-peeve of mine!). Here’s the topic that I am so passionate about:

An IPO is NOT an exit strategy, it’s a funding event.

More important, my guest post outlines what companies need to do to prepare for an IPO, and what they should expect after they achieve it. The following are the three critical points I offer in the post. I invite you to go to the OpenView Labs post to get the full story:

  1. Don’t juice quarters or smooth spending pre-IPO.
  2. Draw up a financial plan for the two to three years after an IPO.
  3. Act like a public company before you actually become one.

Ultimately, your pre-IPO goal should be to prove to yourself (and to investors, for that matter), that your business has the ability to continue growing beyond an IPO. If you can’t do that, all of the excitement and energy of your big moment will crash and burn when reality sets in.

And no entrepreneur wants to experience that kind of exit.

 

 

Phil is former Chairman and CEO of Marketo. He is a Silicon Valley veteran, with more than 30 years of experience building and leading breakout technology companies. Phil is a well-known writer and speaker on topics related to digital marketing, marketing automation, big data, and entrepreneurialism, and is the author of Revenue Disruption (Wiley, 2012), which delivers bold new strategies for any company to transform its sales and marketing to accelerate revenue.

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Why an IPO is NOT an Exit Strategy, And How to Plan for It

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