In 1995 we started Broadcast.com as AudioNet. In July of 1998 we took the company public.  Within a year, 300 of our 330 employees were worth more than $1mm  in Broadcast.com stock.  We became one of almost 300 companies to go public that year.  We were one of about 125 to go public with under $50mm in sales and we became one of the 8k public companies listed on the major exchanges.

The amount of destruction in the IPO and public markets since then and its impact on this country are what can only be described as horrific.

Let’s go back in time and look at the Entrepreneurial thought process.  I remember my goals and those of my peers very well. Build a great company. Grow it as big and as profitable as you could, with the ultimate goal of not only generating profits, but also taking the company public.

Why take it public? Because the stock market was a source of cash that could help you grow. It was a marketing and validation opportunity that told customers and prospects you had arrived. It was a liquidity opportunity that while not guaranteed, if you could continue to grow the company over the long haul, would value your company at a multiple of earnings and allow me, my investors (many who were close friends) and my employees to increase our net-worth and cash holdings.

The capital from the public markets could also allow us to retain our independence.  As a public company we not only had our IPO cash, we could go back to the markets for additional offerings.  Keep moving forward towards our corporate goals and the possibilities were only dependent on our ability to execute our plans. Being public, unlike the private markets where every cash raise is a battle over valuation,  we knew exactly how the market was valuing our company.

As a private company the best I could do was take cash out of the business as a reward. That’s not a bad thing. It had worked well in my first company, MicroSolutions.  We never had a losing month and I was able to generate a lot of cash.  But anything I took out was not there to grow the business.  Maybe I took too much out, but we never were quite big enough to go public. Our liquidity event that rewarded me, my partner and our employees came in the form of a sale to CompuServe.  Even though it worked out well, had I been able to take MicroSolutions public, I would have.