Ball: Public market scrutiny forces tech companies to build long-term endurance
Jamin Ball · Ed Sim & Jamin Ball: Did Figma Kill M&A Markets & 3 Requirements to IPO in 2024 | E1101 · 20VC with Harry Stebbings · Jan 10, 2024 · at 58:28
Jamin Ball, Partner at Altimeter Capital, discusses why late-stage tech companies should embrace public market scrutiny during the IPO process rather than fear it.
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“Like that will force companies to get fit. That will force companies to talk about their path to profitability. It will force companies to think about why are we an enduring business over the next 10 years? And while it may seem scary, it's actually like a good forcing function on let's get fit. Like, let's, let's build the muscle that will help us sustain and endure for the next, call it, you know, 10 plus years.”
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More from Jamin Ball
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“I think there's the vast majority of companies who raise these mega rounds in 2021. Will probably never be worth at any point in time, right? The valuation that they were given in the public markets.”
Ball: ZIRP-era funding rounds lacked ratchets blocking down-round IPOs
“The reality of the moment we live in today is a lot of these zerf rounds, they didn't have ratchets. It was the opposite. They were very light on terms and they were very light on structure. So you don't have this Dynamic of super heavy ratchets, anti-dilution…”
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“I think kind of down rounds or down round IPOs will be the same thing. There'll be a taboo on them, but they'll be normal.”
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“From a regulation standpoint, it is really hard to see any large-scale M&A.”