The Founders'goals
Pascal summed up the strategic aims of the three amigos in the following words :
We are builders, not caretakers. We want to implement our grow plan in order to realize our breakout vision for Plaet and win recognition in the industry and the capital markets. We have invested our capital and our sweat. We look forward to earning a sizable return on our investment, to be realized through an initial public offering. Throughout the financing process , we want to resist diluting our economic and voting interest in the company.
The market for initial public offering s
Analysts observed that both Europe and the United States were in the midst of an impressive wave of initial public offerings ( IPO ). Exhibit 1 presents information on offerings in recent years. Over long periods, the equity market' interest in the shares of new public companies waxed and waned. During periods of high interest, many firms went public ; during periods of low interest, few firms did. Thus, the ability of a firm to go public might depend both on the frim's readiness for a public offering, as well as the receptiveness of the equity markets. Analysts cautioned entrepreneurs to prepare their firms to be ready to exploit a capital market window of opportunity.
In early 1996 the equity markets in Europe and the United States were near the highest levels in the past 10 year. Luis, Michael , and Pascal believed that if Planet were to sell equity to investors, the firm would realize higher prices in the current market environment that if they waited and had to issue equity later in a less buoyant market.