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【V+ Perspective】The Company Finally Went Public—So Why Could Its Series A and Series B Investors Still Lose Money?
- 18 hours ago
- 3 min read
Markets have been highly volatile recently. Some startups spend years working toward a successful IPO, only to see their share prices peak shortly after listing.
Many people ask:
“Isn’t the company still growing?”
“Isn’t the industry highly promising?”
“If the company has successfully gone public, shouldn’t its early investors have made substantial returns?”
The reality is:
A successful IPO does not mean that investors in every funding round will make money.
Some companies celebrate their listing by ringing the opening bell, with their founders taking the stage—yet their Series A or Series B investors may still be sitting on losses.
The reason is simple:
A good company is not always a good investment, and a successful IPO does not necessarily mean that the original entry price was reasonable.
Two years ago, a takeaway coffee shop opened downstairs from our office. The coffee was excellent, and the business was backed by celebrity investors. For the first six months, customers lined up every day.
By the second and third years, the coffee was still good, but business had clearly declined.
The product had not deteriorated. The hype had simply faded.
A Starbucks across the street charged a similar price but offered seating and a broader food menu. Meanwhile, the convenience store next door sold acceptable coffee for less than half the price.
Ultimately, consumers still ask:
Does the value I receive justify the price I pay?
The same principle applies to investing.
When capital is abundant, market themes are popular, and comparable-company valuations rise rapidly, startups may raise their Series A or Series B rounds at very high valuations.
Suppose a Series B investor enters at a company valuation of NT$10 billion. Several years later, the company successfully completes its IPO, but its listing valuation is only NT$6 billion.
The company has indeed gone public, but the investor may still lose money.
Actual returns may also be affected by dilution from subsequent fundraising rounds, employee stock options, preferred-share conversion, underwriting discounts, lock-up periods, and post-IPO share-price volatility.
Therefore:
An IPO is a liquidity event, not a guarantee of profit.
Going public is an important corporate milestone, but it is not the final measure of investment returns.
Public-market investors generally benefit from greater liquidity. When their investment thesis proves incorrect, they can usually adjust their positions.
Private-market investing is fundamentally different.
From the initial investment and supporting the company’s growth to achieving an eventual exit, the process often takes five, seven, or even more years. Investors cannot simply enter and exit quickly whenever market conditions or investment themes change.
Private-market investors therefore should not ask only:
“Will this company eventually go public?”
They should also ask:
“At what valuation could it realistically go public?”
“Does today’s entry price provide an adequate margin of safety?”
“Will the expected return remain attractive after multiple rounds of dilution?”
“Even if market valuations decline, can the company continue generating revenue, profit, and cash flow?”
Companies worthy of long-term investment must solve a genuine and sufficiently large problem, possess a sustainable business model, offer competitive products, and have a team capable of executing and adapting quickly.
More importantly, investors must consider whether they can provide more than capital—whether they can help the company navigate economic cycles, organizational bottlenecks, and changing market conditions, turning potential value into measurable operating results.
In private markets, investors are not buying a ticket to an IPO.
They are investing in a company’s growth and value creation over the next five to ten years.
The real question is therefore not simply:
Is this a good company?
It is:
Does the price of this good company reasonably reflect its value?
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About VENTURE+
VENTURE+ specializes in SaaS and AI investments, offering more than just funding. We provide startups with strategic guidance, corporate partnerships, and capital market planning. We aim to be the "Best Co-Founding Partner" bridging startups, venture capital, and industry leaders in long-term collaboration.