I wonder how long it will be before there’s a generation of companies that commit to staying independent and enshrine it in their company charter, in the same way that B Corps have committed to considering all stakeholders in the running of their businesses. By staying independent, I mean committing to either IPO or ICO or stay private. A commitment to not sell out to Big Co.
Counterintuitively, I think the explosion of VC funding has not been good at all for competition. Yes, lots of new (software) companies get started. But as soon as they take that first dollar of VC funding, the company commits to optimising for an exit in the next 4-7 years. They also give up at least some control over what that exit will look like.
This means the company will definitely not stay private, which leaves either an IPO or exiting to Big Co. From a VC perspective, exiting to Big Co means an immediate realisation of a return, in full. IPO’ing, on the other hand, means at least a partial lockup and facing the harsh realities of the public markets. For a VC, Big Co looks pretty good.
For the entrepreneur (and her employees), it doesn’t look quite so good. She gets some realisation of her shares, but the rest of them are vesting. She’s probably not a good fit in Big Co (being an entrepreneur) and soon realises her baby is sold and gone. Not great.
My guess is that some smart companies will start to find ways to monetise the value of committing to independence. They will use new funding mechanisms (crowdfunding, ICOs) to build their businesses without committing to a quick financial exit, and will build a super-credible brand around their independence. I don’t know of any companies that have actually enshrined independence in their charters yet, but Brewdog and some of the D2C brands are at least part-way there.