Wired on Public High Techs

No_IPO

Last week Felix Salmon, a Reuters blogger writing for Wired Magazine’s Epicenter website, published a thorough and well-done article called For High Tech Companies Going Public Sucks.  It investigates, with several examples, how the act of becoming publicly traded can consequentially destroy a high tech startup’s business model. The story touches upon, among other things, the history of the IPO’s impact on high tech companies, why going public might be irrelevant to those companies that already have VC capital, and how conflicting  interests from either VC or general-public investors results in a struggle for short-term profits over long-term best practices.

It ends on a positive note though, referencing potentially new SEC legislation that would change the tipping point at which a company would need to publicly sell its equity.  This one’s definitely worth the read if you follow the industry.  It almost makes me feel sorry for Mark Zuckerberg.  Almost.