Venture Capital

On Leaving Money on the Table and the Endless IPO Window'

Jason Lemkin

Lately I’ve had several conversations with top notch executives, where they were looking to leave millions of dollars in vesting stock options or RSUs (millions) in favor of ‘starting again’ with unvested equity in post-traction start-ups (like at very high strike prices).  Implicit in this is a sense of extremely low risk in joining something pre-IPO, and of leaving something doing quite well.

I’ve also observed a general VC lack of objections to any worries at all about IPO windows for SaaS companies.  The thinking seems to be, so long as SaaS companies can hit $80-$100m in ARR (a huge accomplishment, granted) and still be growing, they can IPO no matter what the current state of the public markets.  The relatively small-ish IPOs of Cornerstone OnDemand and Jive, and the general huge performance in the market of all SaaS players, seems to have bolstered this group-think.

The current venture SaaS valuations, which seem to be based on multiples of next year’s revenues, seem to neatly incorporate this “window never closes” thinking.

I’m not saying either is wrong.  But leaving millions of vesting options on the table for a not dramatically different role in a mid-to-late stage start-up seems very 1998/99 to me.  And not seeing any IPO windows at all is a new one to me.

Good times, forever.  I’m down with The Endless Summer … even if the end of daylight savings time is just around the corner …

Published on September 26, 2012


  1. Jason, great post. I left Pandora to start a SaaS offering that addresses huge opportunity in digital publishing advertising. My thinking: we will be cheaper than existing offerings, and more scalable, and we will be social where others are not. If markets shrink after we raise capital, we should be in a great position to target existing sites looking for savings – AND, we should be able to attract great talent freed up by collapsing startups. However, if venture funds collapse before or at the same time as public markets, we’ll be dead in the water. IPO? I believe all startup should grow with flexible plans that do not hinge their entire success on a brief IPO window. Other options must be entertained……

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