Form S-1

Hey there,

Welcome to Week 22 of TechExec - the newsletter that turbocharges your growth to become a Tech Executive!

As always, we are sharing a new set of BLTs this week

• 💼 B - a Business concept / theory / story

• 💝 L - a lifestyle advice

• 🤖 T - a Tech explainer

Here is the schedule:

Monday —>💼 B - a Business concept / theory / story

Wednesday —> 💝 L - a lifestyle advice

Friday —> 🤖 T - a Tech explainer

This week we will cover the Spotlight Effect on Wednesday and GPUs on Friday.

Today’s Business Concept is the Form S-1!

💼 B - Form S-1

Until recently, I had no idea what Klaviyo did. Did you? In my defense, I don’t own an e-commerce brand, so I never had to use Klaviyo. But I am a sucker for good but relatively unknown companies that are profitable. It turns out, Klaviyo isn't just riding the email marketing wave; it practically owns the entire beach! This platform has become the go-to choice for eCommerce wizards, and it's not stopping at email. Nope, it's spreading its magic to other realms like SMS and push notifications.

But why are we talking about Klaviyo? Because they recently filed their S1! Okay, I am confusing you more. What is Form S-1 now? Well, that is today’s topic!

Let's dive deeper into this exhilarating world of finance and understand what S-1 filings are. An S-1 filing is a document that companies are required to submit to the Securities and Exchange Commission (SEC) when they intend to go public — yes, the exciting moment when they launch an Initial Public Offering (IPO)! This document, in essence, provides a comprehensive snapshot of the company's business model, financial health, management team, and other crucial details. It's like a 'tell-all' book that gives potential investors an insider's view of the company's operations.

Now you might be wondering, why are these S-1 filings so important? Well, when a company decides to go public, it's essentially inviting the public to become part-owners. However, before you invest your hard-earned money in any venture, wouldn't you want to know everything about it? Of course you would! That's where S-1 filings come into play. They provide crucial insights that help potential investors make informed decisions. They're like a crystal ball, offering glimpses into the company's past performance, current status, and future plans!

So what exactly is included in these exciting S-1 filings? Firstly, they include financial statements that detail the company's revenues, expenses, assets, and liabilities—all the fun stuff that gets an investor's heart racing! Secondly, they provide information about the company's business model—how it makes money, who its customers are, and what competition it faces. It's like a backstage pass into the company's inner workings!

But wait, there's more! S-1 filings also reveal details about the company's management team — the captains at the helm of the ship. It includes their background, their track record, and even how much they're paid! Plus, it also provides information about the IPO itself, like how many shares will be sold and at what price. This is like the final piece of the puzzle that helps potential investors decide if they want to jump on board or not.

Now let’s delve into some real-life drama that S-1 filings have unveiled! The most infamous example in recent history would have to be WeWork. When WeWork filed its S-1 in 2019, it revealed a staggering net loss of $1.6 billion. Furthermore, it showed that the CEO, Adam Neumann, had significant control over the company and had even leased properties he owned back to WeWork. This glaring conflict of interest and financial turmoil led to a collapse in investor confidence, eventually causing the company to withdraw its IPO.

Another fascinating case is Luckin Coffee, a Chinese coffee company. Their S-1 filing in 2019 showed rapid growth and expansion, but also substantial losses. However, the real shocker came later, when an anonymous report alleged that the company had been inflating its sales figures. The SEC investigated, leading to the company's shares plummeting and it being delisted from NASDAQ.

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Until next time!

Gaurav