Do venture capitalists leave the company and board of directors after getting their 10x returns. how much ownership does company give to the stock holders and what kind of board of directors do public select and what kind of say it has in selecting/replacing CEO.
After going IPO how does the fluctation of stock price affect the cash/revenue of the company?
Board Venture Capital Exit Strategy
Having once been CEO of a small public company, my very abbreviated answers are as follows:
I can't speak to all of your issues, but I can tell you from working in one company that went public and another that was preparing to, that an IPO changes everything drastically. Quarterly financial results become a driving factor. Employees can't talk about plans that haven't been announced (without the appropriate disclaimers). Its a big change from a private company.
Typically, VC's will leave the board once they have their exit. Some do stay but usually, a publicly traded company will recruit board members with different talents for the next evolution of operations (i.e. growth).
Stock price does not really affect the cash/revenue of a company. Rather, cash/revenue affects the stock price, among other things. Stock price is really a bet on the future growth of the company, what analysts think the industry will do and if investors believe in the CEO's vision.
After an IPO, the ownership retained by the company depends a lot on what is offered via the IPO. It could be 20% or 80%. It really varies depending on the company.
Jeff's comment is a good one. Due to the SEC and Sarbanes-Oxley, a public company has a lot of restrictions, auditing and liability issues that it must look out for. Since investors want returns, CEO's tend to focus on the next two quarters out and push for profit and growth in the near term. This makes any sort of long term plans difficult to implement but not impossible.