Manage episode 302917284 series 2480363
Every startup in the tech world is after a “realisation” – or put in other terms a point in time at which someone puts a real as opposed to notional valuation on your firm – when you sell out in whole via a Trade Sale or in part via an IPO. But how do you IPO? What is the process of IPO-ing actually like? How much does it cost? How long does it take?
Nic Brisbourne, CEO of early-stage VCs Forward Partners, is well placed to explain these topics and many more to us as he is a long-term VC and VCs’ funds rely of course on getting money from successful companies not just putting money in.
However this is merely his indirect experience. We have the great benefit here of not just one who has seen the process countless times as an investor but someone who has initiated and now gone through the process with himself and his firm.
Topics discussed include:
- the relationship between an interest in Chelsea and meditation
- how Nic got into meditation and the cool story about where he learned it
- Nic’s career journey
- the complex circs that led to Forward being created and how it was created
- what kind of companies benefit from Trade Sales rather than IPOs
- IPOs vs Trade Sales lead to very different futures
- how long does it take to IPO?
- how far in advance does one need to start examining the whole process/possibility?
- the value of early conversations to establish “investing in lines not dots”
- Forward’s journey was three years
- the gradual journey to commitment – what this entails and what needs deciding
- hiring advisers and brokers
- the difference between marketing for a fund vs marketing your company in an IPO
- testing the water
- “pushing the Go Button”
- how much internal time was taken up and how many people involved
- how much do IPOs cost? Sunk costs, success/contingent fees et al
- how to assess costs in the case of aborting or a failed IPO – in Forward’s case this would have been around £1/2m
- the overall costs are not yet disclosed but are “a few million”
- selling existing shares, selling new shares – similar logic to “round raises”
- Forward’s IPO was anomalous in that no existing shareholders sold any shares
- how to manage advisers and conflicts within advisers
- Goldilocks principle – you don’t hire an adviser but never take their advice, equally its advice and you are the principal
- the pushback is mostly at the detailed level
- how Forward solved the adviser- and IPO-management process challenge
- AIM-listing includes being regulated by your broker (“Nomad”) and the two-hat challenge this creates as well as the complex relationship between advisers
- conflicts between simplicity and clarity vs comprehensiveness is the most common source of debate between principal and advisers
- how the business changes – implications for management as well as for employees
- for VCs there is a huge difference in risk between being a general partner and a business
- Forward’s motivation in IPO-ing and the gains – esp permanent capital and more strategic flexibility to execute their vision (eg structuring their debt business, Forward Advances)
- Forward focus in UK on pre-seed and seed investments in applied AI, marketplaces and e-commerce
- Forward’s “studio team” – effectively an internal agency run on behalf of portfolio companies
- Forward Advances makes loans of £10k-£1m
- Forward are hiring…
And much much more!
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