Change the World



Regardless of the strategy you choose – IPO, sell or stay private – the best possible outcome for your company is to “make a dent in the Universe,” as Steve Jobs would say.

While Apple was changing the way the world consumes entertainment, it was also changing the net worth of the founding team. The company has been a colossal financial success, with a split-adjusted IPO price of $2.75 and a current trading price of $449.

Twitter is another example of a brilliant idea designed to simplify the complexities of the world. Arab Spring. Occupy Wall Street. The list goes on. And while the list of life changing events took place on Twitter, the platform was able to amass enough loyal users to attract close to $1 billion in projected advertiser dollars for 2014.

The self-funded phenomenon MyFitnessPal set out to make achieving a healthy lifestyle fun and easy. They now have over 30 million dedicated users and investors banging down their door.

When your goal is to make a huge (positive) impact on society, the probability of success is higher. Whether success is defined by an IPO, a billion dollar exit or a lifetime of steady profits, your chances of getting there are greater when you build a company that is focused on delivering a life changing experience to the end user.

Now that we understand the key to building a successful company, let’s take a look at the difficult decision of IPO, sale or hold.

The decision to go public, sell or stay private is always determined by the goals of the startup. Few companies want the pressure of becoming a public company. It requires a continued focus on meeting the expectations of the myriad of analysts who poke, prod and report on publicly traded companies. Selling for a healthy profit is an easier exit to digest; if you don’t mind staying on for a few years to collect your earn out. And, of course, maintaining your privately held company would allow you to maintain full control of your company.

As you build your funding road map, keep your end goal in mind. If you think you might want to maintain your privately held company, you will want to steer clear of any investor who is looking for a substantial return on his or her money. Focus on investors who are willing to lend money and/or receive a percentage of future profits.

This post originally appeared on Atelier Advisors. Lili Balfour is the founder and CEO of the SoMa-based financial advisory firm, Atelier Advisors, creator of Lean Finance for Startups and Finance Boot Camp for Entrepreneurs. All AlleyWatch readers are automatically eligible for a 50% discount on either of the courses using the preceding links.

Image credit: CC by Steve Corey

About the author: Lili Balfour

Lili Balfour is the founder and CEO of the SoMa-based financial advisory firm, Atelier Advisors, creator and host of Finance for Entrepreneurs, author of Master the Finance Game, and host of the Finance for Entrepreneurs broadcast on Spreecast.

After spending fifteen years in investment management and investment banking, she decided to develop a firm to cater to the specific needs of early-stage companies. At Atelier Advisors, Lili advises leading brands across industries: from tech to consumer goods. In the past, she has advised over 100 brands, including:

Bag, Borrow, or Steal, Visual IQ, Alpha Theory, Derivix, Practice Fusion, Peeled Snacks, Sustainable Minds, Firescope, Chix 6, Duchess Marden, Erin Fetherston, Eckart Tolle, and Stuart Skorman (founder of Reel.com, Elephant Pharmacy, Hungry Minds, and Clerk Dogs (sold to Netflix)).

While advising companies at Atelier Advisors, she observed a common theme – -brilliant founders avoided finance. She began writing about entrepreneurial finance to solve this problem.

As a native of Silicon Valley and a first generation Mexican American, Lili understands the importance of imparting wisdom learned in Silicon Valley to the rest of the world. Her goal is to teach the entire planet about entrepreneurial finance.

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