Private equity, a SPAC, and an IPO walk into a bar

The first quarter of 2021 was a busy season for technical departures. There was a heated time in the final quarter of 2020, and it was not surprising that tech upstarts followed liquidity in a variety of ways as the New Year began. There were IPOs, there were direct lists and there were PE deals. Hell, we’ve also seen enough specs that we’ve lost a few tracks; In the midst of all the noise, you have made sure that you miss the note from time to time.

Each path is still open to follow-up exits for startups at a later stage: the IPO market was welcome until a few minutes ago and private equity firms are equipped with cash and are willing to pay more than that in more general terms. And there’s enough spacing to take the whole of the recent Y Combined Class public. Choosing which option is best among the possibilities of a buff is an interesting task for startup CEOs and their boards.

Raising a number of capitals in the process, Digital Ocean goes public through a traditional theological IPO. When you read the results, the SMB-centric public cloud company probably felt like a somewhat obvious IPO candidate.

Private equity, a SPAC and an IPO walk into a bar

The CEO of the exchange company Yancey Spruill spoke about this choice. Leach, on the other hand, decided that a speck outside the gate was the best route. The exchange caught up with Garth Mitchell, the company’s CFO, about the transaction and why it made money for his company.

And, finally, Exchange AlertMedia’s founder and CEO Brian Cruver talked about the decision to sell his Texas-based firm to a private equity firm. In order for this post not to reach any astronomical word count, we will give a brief description of each contract and then summarize the company’s view on why liquidity choice is right.

Starting the journey with the digital ocean, a few notes: First, the company has been nicely publicized about its growth over the past few years. We knew that its annual run rate was about $200 million in 2018, $250 million in 2019 and about $300 million in the first half of 2020. 

It later announced that it had hit the mark in May last year. So when the digital ocean decided to be universal, we weren’t bowling. The company has set a price target of $47 per share, which has a higher edge of the range. Since then, its stock has struggled somewhat, falling below $37 per share before returning to $43.80 at the end of trading yesterday.