While some may see an IPO as the be-all end-all, top Silicon Valley investor Bill Gurley believes that going public isn’t for everyone.
In an interview with Forbes contributor Eric Jackson, Gurley spoke about his experiences as an investor and gave up some advice for startup CEOs. The first being when and when not to IPO.
“I like to think about being public using the metaphor of college and professional sports,” Gurley said. “Going public is akin to going pro. It’s not for everyone. The vast majority of D1 college players never play professionally.”
While it may seem like it’s gotten a lot easier to IPO, that doesn’t mean that all startups should take the jump. Just like a college athlete going pro, a startup that IPOs will be under a lot more scrutiny and need a much more experienced team and better execution, Gurley explains.
If a startup is not ready to have every little detail critiqued by the public eye, an IPO is probably not the best move. Those who will most benefit from IPOs will see it as a weapon to forward their company, not a burden that adds more nuisances.
“Imagine a first round NFL draft candidate who is afraid of turning pro because the press will pour over every single statistic and every single play,” Gurley said. “He is also worried that this detailed scrutiny will prevent him from developing his own long-term skills. If you were a GM or a coach would you draft someone like that?”
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