Nine Characteristics of Successful Entrepreneurs

Have you ever thought about striking out on your own? After all, being your own boss can be an exciting prospect. However, owning a business isn’t for everyone. To be a successful entrepreneur, you must have — or develop — certain personality traits. Here are nine characteristics you should ideally possess to start and run your own business:

1. Motivation

Entrepreneurs are enthusiastic, optimistic and future-oriented. They believe they’ll be successful and are willing to risk their resources in pursuit of profit. They have high energy levels and are sometimes impatient. They are always thinking about their business and how to increase their market share. Are you self-motivated enough to do this, and can you stay motivated for extended periods of time? Can you bounce back in the face of challenges?

2. Creativity and Persuasiveness

Successful entrepreneurs have the creative capacity to recognize and pursue opportunities. They possess strong selling skills and are both persuasive and persistent. Are you willing to promote your business tirelessly and look for new ways to get the word out about your product or service?

3. Versatility 

Company workers can usually rely on a staff or colleagues to provide service or support. As an entrepreneur, you’ll typically start out as a “solopreneur,” meaning you will be on your own for a while. You may not have the luxury of hiring a support staff initially. Therefore, you will end up wearing several different hats, including secretary, bookkeeper and so on. You need to be mentally prepared to take on all these tasks at the beginning. Can you do that?

4. Superb Business Skills 

Entrepreneurs are naturally capable of setting up the internal systems, procedures and processes necessary to operate a business. They are focused on cash flow, sales and revenue at all times. Successful entrepreneurs rely on their business skills, know-how and contacts. Evaluate your current talents and professional network. Will your skills, contacts and experience readily transfer to the business idea you want to pursue?

5. Risk Tolerance

Launching any entrepreneurial venture is risky. Are you willing to assume that risk? You can reduce your risk by thoroughly researching your business concept, industry and market. You can also test your concept on a small scale. Can you get a letter of intent from prospective customers to purchase? If so, do you think customers would actually go through with their transaction?

6. Drive 

As an entrepreneur, you are in the driver’s seat, so you must be proactive in your approaches to everything. Are you a doer — someone willing to take the reins — or would you rather someone else do things for you?

7. Vision

One of your responsibilities as founder and head of your company is deciding where your business should go. That requires vision. Without it, your boat will be lost at sea. Are you the type of person who looks ahead and can see the big picture?

8. Flexibility and Open-Mindedness

While entrepreneurs need a steadfast vision and direction, they will face a lot of unknowns. You will need to be ready to tweak any initial plans and strategies. New and better ways of doing things may come along as well. Can you be open-minded and flexible in the face of change?

9. Decisiveness

As an entrepreneur, you won’t have room for procrastination or indecision. Not only will these traits stall progress, but they can also cause you to miss crucial opportunities that could move you toward success. Can you make decisions quickly and seize the moment?

 

 

 

Written By: Ruchira Agrawal
Source: Monster

Want a Back Rub? Tech Doles Out Perks for Talent

Provided by CNBC

Pity Silicon Valley job recruits.

In the battle for top talent in the technology sector, the allure of perks such as free massages and unlimited vacation has lost some of its luster, by some accounts.

Job sweeteners have become almost a necessity, even in an uncertain economy, as top talent is no longer seeing the value of switching jobs.

“They’ve seen too many of their friends take jobs at companies that fail, or sign on with entrepreneurs who don’t know how to manage,” Ryan Armbrust, managing director at ff Venture Capital, told CNBC recently. That means job seekers are looking for benefits that are both quantitative and qualitative, he said.

“When options don’t seem to have present value and every company looks the same at face value, companies are forced to resort to incentives, like offering SoulCycle classes and Warby Parker sunglasses,” Ambrust added.

According to Silicon Valley watchers, the list of possible perks are virtually endless. Future tech pioneers can expect activities like ping pong, personal trainers, afternoon meditation sessions, group fitness, and beverages on tap. For veterans, trips to Puerto Rico are no foreign concept, and some of the more adventurous firms let employees bring their pets to work — or even let you sleep on the job.

Still, some argue that on-the-job bonuses don’t necessarily move the pendulum for many workers.

“The perks typically play a marginal influence on the decision making process because most companies are offering the same benefits,” said David Saad, co-founder of SpringSprout, a New York-based recruiting firm. “The main factors that engineers consider now include depth of technical challenge, caliber of the team, personal interest in product, compensation, and more recently, if the company offers a social good element.”

Firms are also more open to accepting engineers from “bootcamp” programs, instead of candidates with years of industry experience. “The cost of lost productivity from not having enough engineers heavily outweighs the cost of any barriers to getting engineers on-board,” Saad said.

According to the firm, more influential factors are a company’s willingness to relocate potential recruits, or sponsor them for foreign visas. According to data from SingleSprout, they’ve seen a 30 percent increase in relocation offers to bring people to New York City.

Back rubs, out-of-town trips and other things “are nice to haves, but they are not swaying people anymore,” Natan Fisher, SpringSprout’s other co-founder added.

Yet in the war for talent, tech companies like Google  (GOOGL), Apple  (AAPL)and Facebook  (FB), have a separate battle to wage. Silicon Valley giants have repeatedly come under fire for the anemic ranks of women and people of color among their work force. In 2015, female engineers made up an average of just 7 percent of tech teams they’ve worked with, a small increase from 5 percent in the previous year.

SingleSprout’s founders told CNBC they are more frequently asked to dedicate more resources for targeting programs and companies that employ minority engineers, as the tech industry scrambles to improve its diversity.

Armbrust, of ff Venture Capital, noted more coding schools are attracting more and more women, who will now be entering the work force.

While he expects to see this growth continue, he cautioned it will take time.

“Educators are doing a better and better job supporting women within these fields, but we will need continued focus here in the future to create a balanced workforce,” Armbrust said.

Written by Uptin Saiidi of CNBC

(Source: MSN)

5 Tips for Securing a Small Business Loan

You have the greatest business idea, a no-fail plan, and a stellar team ready to help you execute your vision. With no capital, though, your entrepreneurial goals may remain just a dream.

The SBA reports startup companies typically encounter the most challengeswhen applying for a small-business loan. Here are five tips to keep in mind to secure the finances to power your small-business venture.

1. Find the Right Lender

There are many types of lenders you can approach for a small-business loan. Approaching the most appropriate one increases your chances of propelling your business. Lender choices include:

  • Large national financial institutions. You may approach your current bank for a traditional bank loan. Since you already have a built-in relationship, this lender may help point you in a better direction if they’re not able to help.
  • Alternative lenders. Alternative lenders bridge the gap between big banks and community lenders with moderate requirements. Alternative lenders such as SnapCap may help niche businesses secure fast business loans as they focus on potential growth versus business owners’ credit scores.
  • Community lenders and credit unions. Locally-owned banks or lenders with interest in the economic growth of a specific area may be a good fit for locally-focused businesses.

2. Do Your Homework

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Maxism-Fotolia.com

Find out what the lending institution requires in the approval process. You’ll typically need to:

  • Have a solid business plan. Loans are typically not granted to lending, speculating, or gambling ventures.
  • Have exceptional credit history. This includes both personal and business credit history, which should be verified by the three major credit bureaus.
  • Have strong personal and business assets. This proves to the lender you’ll be able to pay them back.
  • Have a positive relationship with the lender.Having a constructive relationship with the lender before you even apply for the loan may increase your chances of achieving it.

3. Sort Out the Details

The clearer you can present your business plan to the lender, the more they’ll be able to understand and trust in your venture; the more details you provide, the better. During the application process, you’ll want to communicate:

  • Why you need the money and what it will be used for. The more essential these factors are to the growth of your business, the more they’ll impact the lender. Bailing out business losses does not convey return of investment.
  • A detailed budget of how each portion of the loan will be spent. Use up-to-date financial documentation and cash flow projections researched by a qualified expert to support your claims. Be prepared to explain industry risk, based on government ratings.
  • The partners and suppliers you’ll be working with when spending loan money. Lenders will want to verify the businesses you’ll be spending your money with are credible, as well.

4. Come With the Right Team

Your business practices aren’t the only deciding factors in whether or not you’ll get a small-business loan. Lenders will also want to:

  • Know your leadership. The executive members of your business should have exemplary credit and business history.
  • Know your other investors. You’ll want to disclose who else is putting faith in your company and what their relationships are to you and your business.
  • Know you have equity in the company. If you are not personally invested in the business in some way, this decreases the trust the lender will have when considering distribution of the loan. You’ll want to convey passion when communicating to the lender about your business and provide examples of how you see your company growing, whether it’s through distribution partnerships or new product plans.

5. Get Free Help

Navigating the small-business loan process, especially for a business that is new to the ins and outs, can be tricky and overwhelming. Thankfully, there are free sources of support that can help you along the way:

  • SBAThis government organization is designed to help small businesses like yours succeed. You can find at least one branch office in every state. The SBA also represents a national network of about 100 women’s business centerstargeted to female entrepreneurs.
  • SCORESCORE provides a network of free business mentors, so you can find an expert directly related to your field and learn from their successes.
  • Small Business Development CentersSmall Business Development Centers (SBDCs) offer free business resources and assistance from professionals and professors. There are more than 900 centers across the country.

By taking the time to prepare for the small-business loan application process, creating a detailed business plan that addresses any concerns you may encounter, finding the ideal lender for your type of small business, surrounding yourself with colleagues and investors as driven as you are, and using free resources for help, you’ll be able to procure a small-business loan that could be the key driving force in your business future.

Written by Miguel Salcido of AllBusiness.com

(Source: MSN)

Silicon Valley’s $585 Billion Problem

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VCs have pumped up the value of the “unicorn” startups. Now tech IPOs are in trouble. Good luck getting out.

Of all the Silicon Valley IPOs in the past couple of years, Lending Club’s might have been the surest bet of all.

The San Francisco peer-to-peer lender is a star in the world of “fintech,” a growing sector made up of financial technology companies bent on disrupting the traditional banking sector. Its backers include venture capital royalty such as Kleiner Perkins and Union Square Ventures, not to mention Google (GOOG) and Alibaba (BABA). The startup’s gold-plated board of directors includes luminaries such as John Mack, the former CEO of Morgan Stanley (MS); former Treasury Secretary Larry Summers; and Mary Meeker, the one-time doyenne of Internet IPOs who is now a Kleiner partner. In other words, Lending Club (LC) had assembled a very smart-money crowd. Its much-buzzed-about offering was viewed, understandably, as a slam dunk.

In December 2014, led by underwriters at Morgan Stanley and Goldman Sachs (GS), Lending Club priced its shares at $15, above the high end of the proposed range of $12 to $14. The IPO was 20 times oversubscribed and instantly gave the company a market value of nearly $6 billion. On the first day of trading, Lending Club’s stock jumped almost 70% before pulling back to close at $23.42 a share, a one-day pop of 56%. For shareholders who got out quickly, it went in the books as another very successful offering.

Then reality set in. Lending Club’s stock peaked about a week after its IPO, at nearly $26 a share, and has been retreating ever since. Never mind that the startup delivered extraordinary financial results in its first year as a public company: Lending Club’s operating revenue was up more than 100% in the first nine months of 2015 compared with the same period in 2014, and its Ebitda, a measure of earnings before subtracting expenses such as interest and taxes, was up more than 200%. The stock recently traded around $8 a share, nearly 50% below its $15 IPO price.

Naturally, Lending Club CEO and co-founder Renaud Laplanche wishes the stock price were higher. But he’s trying to look past short-term vicissitudes. “Part of the main reason for going public was to continue to establish Lending Club’s brand and credibility,” he says. “We’re building a big company. It’s going to take a very long time, but we want to do it in the public eye with full transparency. I think from that standpoint, we got rewarded. I think the Lending Club brand is a lot more established now than it was a year ago.”

That may be true with customers and bankers, but ask any retail investor who made a bet on Lending Club at around $20 a share about the company’s brand today, and the response is likely to be a grimace followed by a torrent of vitriol.

Unfortunately the Lending Club story is not an isolated case. Time and time again during the current IPO cycle, Wall Street underwriters–egged on by ambitious CEOs, hungry venture capitalists, and favored institutional investors–have hyped one technology IPO after another. The bankers price the offerings for perfection, watch them soar on the first day of trading to deliver the coveted first-day spike, and don’t stick around to offer an explanation after the shares plunge below the first-day price. (Morgan Stanley and Goldman Sachs declined to comment for this story.)

Welcome to the world of zombie tech stocks–once-highflying IPOs wandering aimlessly in the wasteland of the public equity markets and understandably unloved by investors. Many have familiar names, such as Zynga (down about 75% from its IPO price), Twitter (down 30%), and Groupon (down 85%). Online craft marketplace Etsy recently traded 56% below last year’s price at IPO and 77% under its first-day close. Others that are less well-known–like Nimble Storage (67% below IPO price)–have been just as disappointing.

To be fair, some major tech IPOs have soared in recent years, among them LinkedIn lnkd, Tesla Motors tsla, and, after a rocky and controversial start, Facebook fb. But these are the exceptions. The detritus far outnumber the success stories, raising the question, Is the method by which companies go public as broken and inequitable as it ever was? That would certainly seem to be the case. And the problem is especially acute when it comes to tech companies for which relentless forward momentum is key not only to pleasing investors but also to attracting talent and keeping their competitive edge.

This set of facts doesn’t bode well for the current wave of talked-up technology companies in the IPO pipeline–the so-called unicorns, or private startups valued at $1 billion or more by their investors. This once-rare species of startup has proliferated lately in Silicon Valley and beyond–from headliners such as Uber and Airbnb to lower-profile newcomers like Apttus and HelloFresh. Last year Fortune identified more than 80 unicorns for a cover story on the phenomenon; by our most recent count, that number has grown to 173.

According to CB Insights, a research firm that tracks venture capital investments, private investors have plowed some $362 billion into startups in just the past five years.

That means that a tremendous backlog of potential technology IPOs is building up just as the stock market is beginning to look very wobbly after its nearly seven-year bull run. Indeed, U.S. stock indexes began 2016 with their worst first-two-week period in history. The S&P 500 fell 8% in the first 10 trading days, and the S&P tech sector underperformed the broader market by a full percentage point.

For an already weakening tech IPO market, the turbulence in stocks is a punch to the stomach. In mid-January, IPO research specialists Renaissance Capital put out a special report called “Exploring the Disappearing Technology IPO.” The trends it identified were not encouraging. From 2012 through 2014, according to Renaissance, there were an average of 36 venture-backed tech IPOs per year. But in 2015 that number dropped to 23, and only seven of those offerings happened in the second half of the year, partly because of a stock market correction in August. Though the average time from founding to IPO reached a high for tech deals in 2015, the profitability of the typical technology company going public has plunged into negative territory over the past couple of years. The median Ebitda for tech companies going public in 2015 was -$9 million.

All signs point to a continued slowdown in tech IPO activity in 2016, says Kathleen Smith, a principal at Renaissance and the company’s manager of IPO-focused ETFs. She says it won’t take long for the unicorns to feel the chill as well. “What’s happening now is just going to take the bottom out of these private valuations, many of which are imaginary,” says Smith. “And this valuation reset is going to have a very negative effect on new funding.”

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It appears that a reckoning is coming in the tech world. The combined value ascribed to the 173 unicorns by their investors is a stunning $585 billion–an especially astonishing figure given that so many of them aren’t even close to profitable. Sky-high valuations–driven in part by unicorn mania and an influx of money from nontraditional (and less disciplined) venture investors–have limited the number of potential acquirers for a lot of the buzziest companies.

A number of startups may have hoarded enough capital to ride out the rough patch, but even those that survive could experience mass defections and morale-killing “down rounds.” In mid-January, for example, check-in app company Foursquare raised $45 million in new venture funding but was forced to accept a valuation of less than half the $650 million value it was given by its investors a few years ago. “I imagine there’s going to be some pivots in some business models,” says John Gabbert, founder and CEO of VC data provider PitchBook.

There is also certain to be increased pressure from the VC community for any tech company on the verge of readiness to seek the “exit” of the IPO process even as it is shrinking. But every IPO currently trading below its IPO price creates a negative feedback loop, making the odds of the average unicorn getting out a little longer every day. And it doesn’t help that the process is fundamentally rigged against them.

To appreciate the extent of the tech IPO problem, it helps to understand a bit about the IPO process itself. The system has long been designed to benefit the Wall Street underwriters and their favored clients–venture capital and buyout firms, as well as the big institutional buyers of IPOs–at the expense of individual and retail investors, who have been brainwashed into thinking they are getting their hands on the Next Big Thing.

The venture capitalists or private equity investors–who finance the company while it is private–also have a big say in the IPO process. They want to make money on their investment, of course, and generally the most they possibly can. They push the underwriters relentlessly to get the highest price possible for the IPO, securing for them the biggest profit. But near the end of the process they begin to remember that they’re not selling all their shares in the IPO. At that point they actually prefer a dynamic in which the stock is actively hyped–to generate enthusiastic demand for it–but the “float,” or the percentage of the company’s shares sold in the IPO, is kept small (say, around 15%) to curtail supply.

High demand for something in short supply leads to one outcome: a higher and higher price for the stock when it finally hits the market. That way the VCs can double dip: They can crow a bit and notch a big gain on their initial investment (perhaps even selling some shares in the offering), but can also know that they were clever in hanging on to most of their stock, especially when the stock moves up smartly on the first day of trading.

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Provided by Fortune

The big Wall Street underwriters set the rules of the game. “Morgan Stanley and Goldman Sachs will tell you it’s not a successful IPO unless there’s a 20% to 30% pop,” says John Buttrick, a partner at Union Square Ventures. “That’s the way they get graded with their clients: Did the stock trade up after pricing? Much of the IPO machine is focused on generating a sugar-rush spike in the trading price during the two to four weeks after IPO. After that, the market takes over: ‘Sorry, not my problem.’ They profess to take a long-term view, but the data shows post-IPO stocks are very volatile in the case of tech IPOs, and that is not a problem the underwriters try to address.”

Another important constituency for IPOs is the big institutional buyers of them–mutual fund firms such as Fidelity, T. Rowe Price, and the Capital Group. They like the first-day pop too, because that means they make money instantly. Twenty-five years ago Peter Lynch, when he was running Fidelity’s Magellan Fund, used to refer to IPOs as “sunset stocks”–as in, “the sun never sets on an IPO in my portfolio.”

Interestingly, it’s a system that has also defied innovation. In the past decade or so, some clever new ways have been created for companies to raise the equity capital they need without going the IPO route. There are now a number of secondary markets where equity capital can be raised privately and where insiders can sell their stock to new investors in order to get some liquidity in ways that were never before available. The JOBS Act, which took effect in 2013, allowed smaller companies to file prospectuses privately and raise capital much more discreetly than in the past, as a way to get some of the benefits of a public offering without the many negatives of excessive scrutiny and regulation. These changes have in fact helped enable the rise of the unicorns. And yet Wall Street hardly appears to have lost its leverage in the IPO process. If anything, the opposite is true.

The aftermath of the financial crisis–a world in which there are fewer and fewer underwriters, and many of the European banks have all but disappeared from the underwriting market–has reinforced the power of the established IPO underwriters to keep the status quo working for them and their best customers.

That means that despite the hype that still surrounds them, the growing universe of unicorns out there has little choice but to submit to the IPO cartel if it wants to raise a significant amount of equity capital. For every Uber, which seemingly attracts as much capital as it wants in the private market at increasingly stratospheric valuations, there are a hundred companies that must submit to the powers that be when it comes to raising new money.

As an example of how regular investors get the short end of this process, consider the cautionary tale of GoPro (gpro), the company behind every adventure athlete’s favorite digital camera–perfect for attaching to your head so that you can record your wild-ass snowboarding and base-jumping exploits.

Remember how cool Nick Woodman, GoPro’s founder and CEO, seemed in all those interviews that cropped up before and after his company’s IPO? When GoPro went public, in June 2014, at $24 a share, the company raised $491 million, and the lead underwriters at J.P. Morgan Chase, Citigroup, and Barclays pocketed more than $28 million in fees. Right on cue, GoPro’s stock sprinted up nearly 50%, delivering that all-important pop. Within three months, on Sept. 30, 2014, it was near $95 a share, giving the company a market value of more than $13 billion.

These days Woodman isn’t talking so much. (He declined a request to be interviewed for this story.) For months GoPro’s share price has been plummeting faster than a mountain biker on a headlong descent. In mid-January, trading in GoPro’s stock had to be temporarily halted after the company warned of disappointing fourth-quarter results and said it planned to lay off 7% of its workforce. Lawyers representing shareholders quickly slapped the company with class-action lawsuits. GoPro’s shares recently traded for less than $12, more than 50% below its IPO price.

It’s been a painful reversal. But many of GoPro’s institutional investors from the IPO probably still have fond memories of the stock. That’s because they got to buy it at $24 and watch it soar to $36–then unload it for a quick 50% gain. What’s not to like?

And if both the venture capitalists and the institutional investors are happy with the first-day pop, then the underwriters are happy too, because their biggest repeat customers are both the private investors and the big institutional investors. To be sure, their high fees–the underwriting charge in the GoPro IPO was 6%–are nice too. But the real goal is making sure that their customers are happy and do business with them again and again. At Goldman Sachs, one of the firm’s mantras is to be “long-term greedy,” and the IPO underwriting process is a perfect example of how it puts that philosophy into practice. It’s one of the few businesses in the world today that has remained virtually impervious to disruption by Silicon Valley.

William Hambrecht has been talking about changing the way IPOs are underwritten and priced for close to 20 years, since he left his firm Hambrecht & Quist (which was then sold to what is now J.P. Morgan Chase) and started W.R. Hambrecht & Co. in 1998 with the hope of upending the way the Wall Street cartel manages and markets IPOs. One of the firm’s high-water marks came early in its existence when it was one of the underwriters of the Google IPO, in August 2004. (There were 31 underwriters in all, led by Morgan Stanley and Credit Suisse First Boston.)

Eleven years on, people may no longer remember how controversial it was at the time for Google to have adopted Hambrecht & Co.’s auction strategy for what became the most important company in a generation. After conducting an online Dutch auction for the Google shares, in which investors named the price they would pay and orders were filled in the order of those who bid the highest price, the underwriters priced the Google IPO at $85 a share, below expectations. The stock closed on the first day at about $100 a share, up 17%. (In the end the lead underwriters didn’t strictly adhere to the auction strategy in its purest form.)

Experimenting with a different IPO pricing model certainly didn’t hurt Google. The tech giant’s stock is up some 1,500% from its IPO, and the company (renamed Alphabet last year) has a market value approaching $500 billion, second only to Apple’s AAPL. Its stock chart looks like one side of the Matterhorn. But very few other companies have been willing to go public the way Google did, through an auction process. (Some have, including Morningstar morn, up more than 400% from its IPO, and Interactive Broker Group ibkr, up about 50%.) Rather than a turning point, the Google IPO is remembered more as a historical footnote.

Hambrecht thinks the way IPOs are manufactured and sold remains a problem. “It really is a system that is broken,” he says. He thinks the “traditional approach” needs to change but knows that the big underwriters won’t do it, despite their understanding, intellectually, that the auction approach is a fairer system. They just make too much money as things currently stand. “The underwriters stick to the traditional approach because, first of all, it allows them to discount the pricing,” he continues. “It gives them selective allocation to their best customers. And they’ve tried to keep a knowledge advantage, so it’s really a proprietary product through the first six months or a year of the trading. All of those things enhance the profitability to the underwriter.”

He says that when, say, Alibaba pops from $68 a share to $115 a share, as it did in the first few months after its IPO, the underwriters cash in because their institutional clients have made a lot of money and pay them back in kind over time. “The people who buy it in the aftermarket are the shareholders who end up, in effect, holding the bag,” he says. Hambrecht doubts that the system will ever change unless a reform is forced on the banks legislatively (as was briefly considered after the Facebook IPO) or their vicelike grip on the large IPO business is disrupted. “It’s deeply entrenched,” he says.

In fact, Hambrecht is so resigned to the inevitable power of the name-brand underwriters that he’s decided he won’t try to fight them anymore. Instead, he’s returned to what he did once upon a time at Hambrecht & Quist: Taking smaller startups public. His latest eponymous firm, Hambrecht & Co., specializes in underwriting for companies that have valuations below the unicorn threshold and garner less interest from the big banks.

Despite the deck being stacked against them during the underwriting process, some executives at newly public companies say they wouldn’t change a thing. In this camp are James Park, the co-founder and CEO of Fitbit fit, and William Zerella, its chief financial officer.

Last June, Fitbit, a maker of fitness tracking devices, priced its IPO at $20 a share, above its indicated range. Morgan Stanley was the lead underwriter. The stock opened up 52% right away and ended up about that much, giving the company a market value of $6.5 billion and making Park nearly a demi-billionaire. In November the company completed a secondary offering, at $29 a share–below the $31.68 a share where it had closed the day before–in which 14 million of the 17 million shares sold came from its VC financiers. It was, in part, a move to reduce the downward pressure on the stock as the expiration of the six-month lockup period loomed. These days, after a poorly received new-product offering, Fitbit trades below its IPO price.

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But despite the stock’s roller-coaster ride, Park and Zerella say they couldn’t be happier with how the IPO was handled. Zerella credits his bankers for the way they ran the process. “They understood our story and were very helpful in articulating it to the Street,” he says, although it also helped that Fitbit is a leader in its space and very profitable.

Park says that he and his management team were excited by the IPO and by being on the floor of the New York Stock Exchange when the stock first traded. He has no regrets about not pricing the IPO higher to get more of the offering proceeds for the company. Park says he understands the players at the table have to get their cut. “I think the worst outcome would have been for it to trade below the offering price [in the days after the IPO],” he says. “It was a delicate dance, and I feel that we struck the right balance in the price of the deal. And the pop on the first day really gave the company a lot of great momentum in the press and with employees.”

Other perks: Park says the Fitbit IPO let the world know just how profitable his company is–with Ebitda margins of around 23%–and how, despite some formidable competition from Apple and others, Fitbit remains the industry leader. He points out that Fitbit now has a currency to use for potential acquisitions and says that going public has given the company’s employees something to root for together–its stock price. “It’s been a great event,” he says. “It really cements us as a world-class company.”

Laplanche of Lending Club, for his part, tries to put his company’s IPO experience in the most charitable light. But he can’t help scratching his head about how the stock has traded since those hype-filled early weeks after the IPO. He says that if the stock hadn’t jumped past $25 a share and had just traded at around $15, there would have been less disappointment, especially for the retail investors. “That being said, if they made a long-term investment, then I’m very confident that we’re going to continue to deliver great results,” he says.

No thanks to the standard IPO process. One of the reasons behind the volatility of Lending Club’s share price is the simple matter of supply and demand. The underwriters at Goldman and Morgan Stanley argued for a float of between 10% and 15% of the shares outstanding, and in the end it was around 15%. That created scarcity value initially, leading to the coveted opening-day pop. That’s the good news. The bad news came at the end of the six-month lockup period, when the Lending Club’s VC investors started selling their shares into the market.

Whether it’s a coincidence or not, Lending Club’s share price moved from about $19 in early June 2015 to a low of around $11 three months later–in effect tracking the increase in supply of stock during the year as the venture capitalists started unloading their stakes in the company.

Laplanche, of course, understands these supply-demand dynamics. But he’s not sure less sophisticated investors appreciate the subtleties of lockup periods and floats. “It can be a bit frustrating, particularly for people who wonder, Okay, what’s wrong with the company? Is there something there that drives the stock price?” he says. “I think we’re a good case study for it because we continue to report good news after good news, so there’s really no fundamental you can point to to explain the stock performance. Really, all that’s left is supply and demand of shares.”

All indicators point to Lending Club being more than strong enough financially to soar past its post-IPO doldrums. In an increasingly tough environment for tech companies, some of its peers may not be.

Written by William D. Cohan of Fortune 

(Source: Fortune)