The stock market today is more like an IPO market. The surge of IPOs was unprecedented last year. With the stories of most startups, after a short while of success, turning on its heels and running to go public, come tales of the owners of these startups. There have been stories of tears welling up in the eyes of startup owners when their small privately-held companies go public. This was exactly the case last winter.
Billionaire Vijay Shekhar Sharma suddenly broke into a flood of tears while launching the Paytm IPO at the Bombay Stock Exchange. The thing that was most valuable for this Fintech founder was the ultimate destination of Dalal Street. Although several startup successes such as Zerodha and Zoho opt to stay chained to their beloved creations, many unicorns want to venture into the domain of the upcoming IPO. If these startups haven’t launched IPOs yet, they’re probably just waiting for the right moment to start.
Many startups today see success early. So if they are so successful, why do entrepreneurs put themselves through the public markets and the stock market today, ruthless places by any description? Everyone knows how the market can turn on its head. So, the question arises, do startups just want to raise more money as VCs are pulling out, or do they wish to get into public markets because they believe that this is a path to future growth?
When you open a demat account to trade in the stock market today, you have to do some due diligence before investing in a particular company stock. You may just select a certain startup that’s just gone public and got listed on the exchange. But are you sure that this will be a good investment? You have to find out why startups are rushing to announce IPOs in the first place.
Recently, the co-founder of Delhivery, and its current CEO, Sahil Barua, wrote a revealing book. The title of the book suggests the ways that startups commonly carve their path to the IPO list soon. “Startup Compass” is a book that tells you that when a startup goes public, it does subject a new company to market vagaries, but it is a good way to raise capital. Furthermore, it is frequently much easier to attract a large pool of investors from public markets than from a niche of private investors. The book is a wonderful expression of stories of some of the most important startups that grew and prospered in the last ten years.
If a private startup decides to become an upcoming IPO, there are many advantages to be had. These translate into reasons why startups may go the IPO route. Here are the reasons why startups may consider releasing an initial public offering:
With any upcoming IPO of a startup, you can gain a lot as an investor. Furthermore, now that you can grasp why going in for an IPO is good for a startup, you may think of allocating your capital to a startup IPO. These days, you can invest in a number of startups that are going in for public listing. What’s more, you do not have to open a demat account to subscribe to an IPO. Something to always be mindful of, whether you invest in a startup or an established company IPO, is to do your background work well before you position your funds.