Recent reports by the Boston Globe say that many Boston-based companies and start-ups are looking to file IPOs in 2014.
An IPO, or an "initial public offering," is the first sale of stock by a private company to the public. Smaller, younger companies—such as the many start-ups in Boston—often issue IPOs when looking to expand their business.
Taking the step of filing an IPO is a huge leap for a company, as it allows individuals to invest at a time where the future of the business is relatively uncertain.
On the long list of Boston-area companies and start-ups seeking IPOs in 2014 are some well-known businesses such as Care.com, the seven-year old “Amazon.com for caregivers,” Zipcar, the car sharing company that has become popular in cities all across the country and Kayak, the online travel booking giant.
The success of Boston’s start-ups in the past provides great hope for companies such as these. In the past decade, 43 companies—dubbed “Unicorns”—in the Boston area have achieved over $500 million in value, 19 of which have earned over $1 billion.
Of these 43 companies, 22 were life sciences, 16 were enterprise technology and 5 were consumer technology. This variety shows that Boston boasts one of the most diverse start-up environments in the world.
The presence of Boston’s flourishing start-up ecosystem has contested the belief that all successful start-ups have risen from Silicon Valley. “The vibrant life science sector is now arguably more heavily concentrated in Boston than in any other cluster at any other time in history,” said Jeff Bussgang, a partner at Flybridge Capital, in a Boston.com blog post earlier in the month.
The overwhelming presence of start-ups is definitely beneficial to the 250,000 college students in the Boston area. These young companies, attempting to gain footing in the business world, provide a vibrant and innovative atmosphere, as well as potential job opportunities for the future: Start-ups are often eager to hire recent college grads in the hopes of “raising them” with the company.
In addition, start-ups are companies that college grads genuinely want to work for. In a recent study by career website SimplyHired, 39% of 2012 college graduates reported wanting to work for small- to medium-sized businesses such as these, instead of large companies.
Why, exactly, do college grads favor start-ups as entry-level jobs? One reason may be the opportunity to make a difference that comes with working for a smaller, younger company.
“There’s no red tape involved with a start-up,” said Jake Duhaime, a 2008 college grad with a degree in journalism, who is now in charge of publicity and special projects for Her Campus Media. “Young professionals can pursue the challenge of opportunity and take their shot at living the American dream…you can’t achieve that kind of thrilling success when you’re wrestling with the politics of corporate culture.”
As the academic year progresses into the 2014 spring semester, keep an eye out for a spike in presence and popularity of Boston-area start-ups: You might just end up working for one.Featured photo courtesy of Timothy Vollmer/Flickr.