Successful startups have several exit options.

Going public on the exchange is one of them.

Here is the test to know if your startup is ready to be a public company:

Can you provide a 20% annual growth rate for the next five years?

This typically requires a stable customer base that is locked in.

This often shows up in high customer retention rates.

It can be seen in the use of the product with high daily active use rates.

Do you have an operations level that is consistent with other public companies in your sector?

Expenses growing at 85% of the rate of revenue or less is a good indicator.

This improves margins over the course of time. 

Can you accurately predict your sales revenue over the next twelve months?

Public investors expect the company to beat its forecast by 5% each quarter.

To do so, the company needs to have a stable revenue stream.

Consider these points before taking your startup public. 

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.