Go, You Vampire Squid

I simply love Goldman Sachs. The Facebook deal is a brilliant poke in the eye for just about everybody, and proof, yet again, that money, like water, finds its own level. If there are buyers and sellers to be matched, and a fee to be made in the process, the fine folks at Goldman Sachs will figure out how to bridge that gap. So much the better if there is regulatory friction to arbitrage against, it simply raises the fee. For the last seven years, the venture capital industry has been saying that the IPO process is broken and startups are the losers. In a fine display of Wall Street?s can do attitude, Goldman has gone and produced an alternative to an IPO; one where the clear winner is the startup.� �Make no mistake; this is a great result for Facebook. �Consider the alternative. Going public is hard, and being public is harder. This is true for a company like Facebook, not because of the cost of Sarbanes Oxley compliance, which would be more than manageable, but because of the insidious nature of being public and having a focus on quarterly earnings, governance and the stock price. No matter how hard you try to avoid becoming short-term focused, the constant drip of analyst meetings, quarterly updates and daily stock price tickers takes its toll. Your earliest and best employees, fully vested and now fully liquid, leave, and instead of building a company, the CEO is getting on quarterly analyst calls. The best reason to go public was to get the money. Conventional wisdom used to say that the only way to raise $1 billion-plus, at an attractive valuation, was to provide investors in return the transparency and the liquidity that being a publicly traded stock entails. The company puts up with the analysts, the information requests and the quarterly filings in return for getting the cash. Goldman has given Facebook all of the benefits �and none of the negatives of a public offering. They should have a happy client.

Source: http://feedproxy.google.com/~r/Techcrunch/~3/O833F-YPkNw/

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