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    One of the biggest TV dramas of the year so far, Empire chronicles the life of fictional hip-hop mogul, Lucious Lyon, who escaped poverty and crime in the projects to carve out a multi-billion dollar recording company. At the centre of his ambitions is to take his company public; his detractors often remind him that his business is hardly the stuff conventional Wall Street big hitters are made of.
    Here in India, we’ve seen a raft of companies issue initial public offerings (IPOs) over the last month. Cafe Coffee Day, that ubiquitous coffee chain you’ll find serendipitously on the national highway when you need to use the loo/grab a cuppa to stay up at the wheel, filed for an IPO valued at `1,150 crore ($181 million) last month.
    More recently, the local papers have been awash with reports of a venerable Bangalore institution going public. Pecos, the popular classic rock-themed watering hole that we’ve all sat in after we skived off college, drew up its paperwork to list on the Bombay Stock Exchange, with expansion plans in mind.
    A well-reported Quartz story cut through the retromania and included a rather pertinent fact: Pecos has seen profits drop in the recent times. Which begs the question: at what point is a start-up ready to go public?
    Now there’s two schools of thought on the subject. The first emphasizes fundamentals — you need to be firmly atop a massive cash pile, with consistently strong earnings before your consider it. Ernst &Young, in their analysis of start-up IPOs, underscore the importance of outperforming your competitors on any given Sunday (or Friday and Saturday evening, as this case might be). It’s the idea that once you’ve hit the $100 million cash pile, you’re good to go.
    Interestingly, not everyone agrees. Glenn Solomon, the American venture capitalist and one of the industry’s sharpest forecasters goes against the grain. Ditch the $100 million revenue formula. Instead, it’s your underlying potential growth and visibility that should matter. There should be a fair amount of familiarity and consistence with what investors can expect from your brand. Even start-up unicorns falter—remember that disastrous Facebook IPO?
    Pecos certainly has visibility in the city and intends to use the capital from the IPO to expand into other cities. On the other hand, they’re buffeted by the rise of the brewpubs. When Lyons decides to take his old school recording company public, it’s to square up against the competition: file-sharing, streaming and new modes of music distribution. Pecos’ narrative certainly reads a lot like Empire’s.

    —pauldharamraj@gmail.com

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