Recently BigCommerce filed their initial S1 statement. They will almost undoubtedly be compared to Shopify! A S1 is a document companies file with the SEC in preparation for listing their shares on an exchange like the NYSE or NASDAQ. The document contains a plethora of information on the company including a general overview, up to date financials, risk factors to the business, cap table highlights and much more. The purpose of the detailed information is to help investors (both institutional and retail) make investment decisions. There’s a lot of info to digest, so in the sections below I’ll try and pull out the relevant financial information and benchmark it against recent cloud IPOs.
Great analysis, Jamin! I especially like how you put a stake in the ground and predicted what their evaluation might be if they went public. A lot of other VCs perform the analysis, but are too afraid to take a position on predicting the success/failure of an IPO. I can see that you are assigning a valuation based on the NTM revenue metric. How do you reckon metrics like operating margins play into these high growth SaaS stocks? Slack for example, has horrendous operating margins. How should it be valued then?
Why do you take GAAP operating margins, wont Non GAAP margins be a more useful indicator removing abnormalities like SBC etc?
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Great analysis, Jamin! I especially like how you put a stake in the ground and predicted what their evaluation might be if they went public. A lot of other VCs perform the analysis, but are too afraid to take a position on predicting the success/failure of an IPO. I can see that you are assigning a valuation based on the NTM revenue metric. How do you reckon metrics like operating margins play into these high growth SaaS stocks? Slack for example, has horrendous operating margins. How should it be valued then?