Adam Hardej

Apr 20, 2023·Newsletter

IPO Season?

IPO Season?

"SeatGeek Files Confidentially For IPO" is a hilarious headline. Can you put the word "confidentially" in a headline?

The Information reported yesterday based off of "people familiar with the matter" that after 14 years in the private markets SeatGeek is making moves to go public. They're riding an uptick of post-pandemic live event goers and hoping to hit the public markets in 2023 if appetites remain steady/improve.

Ticketing is a tough business. SeatGeek's $500M in revenue is fun, but they're getting an average forward sales multiple of around 2 based off public ticketing comparables like Eventbrite and Vivid Seats. It's not recurring. It's competitive. Etc.

The real story here isn't SeatGeek though. They're one of many companies who got caught in this post-pandemic market dynamic where they kind of need to IPO, but it probably won't be pretty.

The Information goes on to mention that this could be a good thing for public market investors who have been getting overpriced IPOs for years. They mention Rivian and Allbirds that are both down over 80% since IPO.

Does the current market dynamic mean that IPOs will be priced in a way that leaves room for public market growth? Maybe.

One thing I'm more sure of is that this is bitter sweet for Founders who have been chopping wood for 10+ years with their eyes on an IPO. Up until recently, my personal visualization of a Founder reaching IPO was similar to a running winning a marathon.

When I hear stories like SeatGeek's my founder heart breaks a little.

SeatGeek's most recent fundraising round was a $238M Series E at a $1B valuation. There's just no way those founders are holding a ton of that equity at this point. Now they're IPOing partly because they can and partly because they have to? Not the romantic ending day dreaming seed-stage founders hope for.

I'm assuming a lot about the the SeatGeek situation and there's a lot of their business that was uniquely affected by the pandemic. That being said, I get a distinct feeling that if this IPO season happens in the Fall it will be one of mixed feelings for Founders and Employees.

To extrapolate further: If IPOs are no longer triumphant moments of glory, will the best founders still set it as a north star? Will savvy builders of the next generation reorient around new goals? Maybe.

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