“Finally, we have arrived!” Employees give a sigh of relief. The wild ride is over. Good times are here to stay (at least for the foreseeable future). This completes the startup trail.
Your startup has achieved dominance of the market category that it is focused on – or is one of the survivors who now compete intensely in the new space (Lyft and Uber). Your product family name is branded as representing the category – the market segment – that you are now thriving in. Google is search. Facebook is social networking. All but one or two competitors have fallen far behind, they are no longer threats to your existence.
Cash is coming in faster than going out. The startup has turned “cash flow positive.” “Burn rate” is no longer burning up cash. There is no need to raise cash by selling shares to venture investors.
Now your startup is called a company. It’s no longer a startup or new enterprise.
Lots of people know the name of your company, what it sells, and what the product/service family brand stands for. You and co-founders are now known around the world and on Wikipedia. Bloggers want interviews of you.
Sales are still growing fast, though at less than the blistering pace achieved during the tornado stage.
All eyes are on the prize yet to be achieved: the gold medal, the initial public offering. It is now thinkable, even being planned for.
Most IPO-ready companies will be slightly profitable. Exceptions are notable however and come in the category known as unicorns, large and losing lots of money, burning cash every month as they adjust their businesses to steer closer to profitability. IPO investors will put their investment cash in both types. The huge institutional investors with IPO-ready cash have already spotted your company and have been monitoring its progress for several years.
People in your IPO-bound company are now working in jobs that have become very stable, altering little month to month. They remain enthusiastic, highly motivated to grow the company larger, every day. Managers have demonstrated competence and thus are respected. Managers are finding it much easier to recruit the ever-larger numbers of fresh employees required to keep the company growing. Early employees are highly revered by newcomers enthralled to listen to stories about the days of birthing the startup. Morale is high, it can be felt by people visiting your company.
Investors in such a remarkable company are counting the days until the big liquidity event: Either the company achieves an initial public offering, or is sold at a high value. Initial Public Offering remains the goal, the gold medal. Venture investors wait eagerly for the great day, counting lucrative valuations that will reward their early high-risk investing. Early employees realize they will become financially independent, could retire soon, become an angel investor – or start their own new enterprise.
Lots of company stakeholders celebrate.
I wish you The Best on your Adventure!