Tableau Software is expected to start trading on the New York Stock Exchange this Friday under the ticker symbol “DATA,” marking the first Seattle tech company to go public since Zillow’s public offering in July 2011. Demand appears to be strong for the 10-year-old company, which could raise up to $248 million in the IPO. (Just today, Tableau boosted its proposed share price to $30 per share, from a previous range of $23 to $26).
It has certainly been a long IPO drought. And, at least in the words of Netscape co-founder and venture capital investor Marc Andreessen, there’s good reason for it.
Speaking on CNBC this week, Andreessen noted that strong tech companies don’t really want to go public.
“When you say what’s the next big IPO, the brutal truth is I don’t know and I’m not sure there is going to be one for quite while because the incentives are so strong to keep these companies private,” said Andreessen, adding that entrepreneurs see the public markets as ” incredibly hostile.”
“The new running theory among new entrepreneurs is never take your company public or don’t do it as long as you possibly can,” said Andreessen. He added that it is “not safe” for tech companies to be in the public markets unless they have dual-class stock, something that Zillow established out of the gate and Tableau also is implementing.
Andreessen’s words should hold extra meaning here in the Northwest since he’s a venture backer of both Apptio (in the news today for raising a whopping $45 million round at a more than $600 million valuation) and Zulily (which last fall raised $85 million at a $1 billion valuation). Beyond Tableau, those are two of Seattle’s best IPO prospects.
“We don’t think companies should go public until they’ve built what I call a fortress,” he said. “They have to be able to repel basically all of the people who come and attack them once they go public.”
Tableau is a bit of a different case since it has raised relatively little venture money, and has been around for a decade. Demand appears very strong for the company’s shares, as evidenced by today’s offering price boost.
CEO Christian Chabot addressed the challenges of watching other fast-growing consumer companies grab attention at the GeekWire Meetup in February.
“After I founded Tableau, YouTube was founded. Zing!! Groupon. Zing!! Zynga. Zing!! Facebook. Ever heard of it? These startup supernovas were all founded after we started Tableau. Now, you see these things, and I don’t know if this happens to you guys, you see these things and, on the one hand, you are totally inspired as just an entrepreneur…. But, of course, on the other hand, you are just so frustrated. Every time that happened, me and my co-founders we’d be like: ‘What are we doing wrong? Are we just stupid? You just naturally think, that: ‘boy, we don’t know how to do this.’”
More nuggets from my interview with Chabot here: