Andrew McMillan, partner at Pinsent Masons LLP, discusses what UK tech startups and scaleups can learn from Snap’s first quarterly results following its IPO.
A company might seek an initial public offering (IPO) for various reasons. These range from access to capital, to prestige; and from enhanced profile and credibility, to the greater flexibility and ability to fund acquisitions with stock, brings. Another typical driver is the ability of existing shareholders to realise some of the gains their investment has enjoyed, while maintaining an interest in the company.
These benefits come at a certain cost. In particular, the increased public scrutiny that attaches to a public listing, is something that will require careful preparation on the part of a company. In particular, a company in private ownership that has, up to the point of IPO, enjoyed a high degree of control over its own narrative, must be prepared for that narrative to be taken out of its hands and used in ways that its founders may find surprising and even, from time to time, damaging....