Conventional wisdom throughout the tech world holds that companies should avoid going public for as long as possible. This is due to a number of primary considerations. However, one of the most important of these is the fact that tech companies are often very fragile, especially in their formative years. A company that is implementing a five-year strategy, which requires very particular steps to be taken and certain capital expenditures to be made, can quickly find itself ruined among the rocky shoals of quarterly performance imperatives
But that doesn’t mean that all recent tech startups are inappropriate candidates for going public. GreenSky Credit, a fintech lending firm that was established in 2006, is now considering going public. Even as the company’s critics vocally rail against its inabilities to safely go public, the company’s founder believes that the time is right to take the IPO plunge.
Simple organisms mature faster
It is a biological truism that the simpler an organism is, the faster it matures. A fruit fly may reach maturity within a day whereas a blue whale may take 30 years to separate from its mother. The same is true of businesses. Although complex organizations may seem more interesting and have certain advantages, in business, things being as simple as possible is usually the optimal state.
GreenSky Credit is an example of a business that has a very simple way of generating revenues. For this reason, the company was arguably mature just a few years after it was formed. The GreenSky Credit revenue model hasn’t changed much since 2008. This is one reason that David Zalik believes that the company is ready for an IPO.
And while there are many reasons why the company is unlikely to be negatively affected by an IPO, there are even more reasons why it may benefit hugely from one. For starters, some analysts have opined that GreenSky Credit may ultimately be valued at near the $10 billion mark, which would make it one of the richest IPOs in the history of the fintech space. All of these reasons have some investors chomping at the bit, waiting for Zalik to finally pull the IPO trigger.