The cloud communications company is the first VC-backed Bay Area one to go public in 2016. What does the Twilio IPO mean for other startups wondering if they should make the same move? Venture capitalist Glenn Solomon shared his thoughts on the event’s impact.
Thread the Needle if You Can
The only IPOs that can succeed by examining Twilio are those who can continue rapid growth while keeping their burn low. Which is rare:
The Bottom Line: Don’t Expect an Upswing
A rising tide may raise all boats, but a rising IPO won’t. From Solomon:
The Best Tech IPOs Happen When the Economy’s Down
The SF Chronicle offers one interesting factoid relevant to the Twilio IPO: history has shown a correlation between huge tech companies going public and a downturn in the economy. That doesn’t mean one benefits the other, though: Just that the biggest and best tech companies are the market leaders that can keep trucking despite a poor economy. Here’s the Chronicle: Twilio appears to have gotten through — at least, so far. But that doesn’t mean that other tech companies have a bandwagon to jump onto. ‘What often happens after a bubble bursts, is the sieve gets finer,” [Duncan Davidson, partner at Bullpen Capital] Davidson said. “It’s harder to get through, but the ones that get through do really, really well.’” Image: Flickr / Ducksboard
