One of the well-known rules of the tech space is that companies should never be brought public until their owners are absolutely sure that those firms will be able to effectively deal with the radically different pressures that being public produces. Among the most serious problems is the constant pressure to hit quarterly guidance and meet short-term investor expectations.
Companies in the tech field that are not carefully guided throughout their formative years run the risk of being derailed and eventually sunk by the pressures that going public subject them to. Without the massive latitude and autonomy that staying private grants, many tech companies have gone public too soon and proven that they were not ready to face the market-force winds produced by public ownership.
GreenSky takes the plunge
In May, GreenSky decided to finally take the plunge and become a publicly traded firm. The company had been growing for 12 years. And CEO David Zalik thought that the time had come for the company to go public.
Unlike many of GreenSky’s closest competitors, like Lending Club and OnDeck, the company had largely matured early in its trajectory. Although the firm has experienced fantastic year-over-year growth, its business model has remained largely unchanged since its first year of operations, further adding to the likelihood that it would be able to successfully make the transition from private to public.
While Zalik retained the majority of ownership in the company, GreenSky was still able to raise nearly $1 billion in the IPO. Much of that money was used to buy out some of the initial investors, who were getting impatient to take some of their chips off the table.
Since the IPO, GreenSky has proven that it has what it takes to continue its strong trajectory of growth as a public company. It did nearly $4.5 billion in loans in 2017. And the company expects to surpass that number in 2018 by a wide margin. GreenSky currently ranks as one of the most successful companies in the fintech space, with a potential market that is still many times larger than the one that the company currently serves.