After four years of existence, Groupon currently stands at a handsome market cap of $1.8 billion. It’s a stellar achievement, sad only because it IPO’d at upwards of $13B valuation. Groupon is but one example of public markets placing unhealthy, aggressive multiples on new-to-market, vulnerable webbies (young web companies).
Let’s re-imagine the Groupon story. Imagine Groupon had steadily grown in the markets to achieve the $2 billion dollar valuation by in turn steadily growing its operations. Groupon would be a proud company with greater organizational efficiences, better ability to scale, and an enjoyable work environment. What a difference! Unfortunately, such luxury is not afforded to webbies. Look at the valuation history of $ZNGA, $FB, $P…well suffice it to say, any recent IPO but $LNKD.
How do we end this unruly behaviour?