LinkedIn's Road to IPO

Linkedin is a social network geared to the work world. The com- pany has more than 1,000 employees and 100 million members in more than 200 countries. Now it will be one of the first major social media IPOS. Learn more: Linked in 's Road to IPO 1 History It all started in 2002, in co-founder Reid Hoffman's living room. After 9 years, Linkedin continues to be successful: o Linkedin was officially founded by: The site launched May 5, 2003, when the founders invited more than 300 of their contacts to join the site. Reid Hoffman Allen Blue Jean-Luc Vaillant Eric Ly Konstantin Guericke -250 250 Number of users In just one year, its 200 net revenue 200 increased 102% In 2011 Linkedin reached 100,000,000 150 members Revenue 150 *** 100 1,600,000 members 4,000,000 members 8,000,000 members 15,000,000+ members 40,000,000+ 70,000,000+ members 33,000,000 members members 2003 2004 2005 2006 2007 2008 2009 2010 2011 Linkedin launches: recruiter and Linkedin mobile products, company profiles, Audience Network, acquires CardMunch Events and Applications Linkedin and IBM Lotus Bessemer and European Founders Fund Linkedin files for IPO partner invest $12.8M Bain Capital in Series C funding palm Ventures Sequoia invests $4.7M in invests $53M Linkedin launches: Polls, Grad Guide, native Linkedin is ranked the #10 most valuable Series A financing Linkedin Jobs is Linkedin application Linkedin launches raises $22.7M for Palm Pre corporate blog, Linkedin Answers, profile pictures, Intelligent Applications Platform and CNBC partner becomes the news product launched start-up greylocipartners The site ends the year with 81,000 members Greylock invests $1OM in CNBC The New York Times and Newsfeed is intro- Jeff Weiner Linkedin Subscription services are launched Series B duced in acquires financing Linkedin with Linkedin new CEO Mspoke Linked in's IPO 2 Shareholders & Ownership 3 Linkedin is going public in an IPO with dual- class share structure. The company plans to sell shares at $45 each. With that range, it would be valued at more than $4 billion. What they could make: 25 O Sequoia Capital, Greylock, Bessemer: $1.6 billion Linkedin has shown how social media can impact the executive and job field. After its IPO, the company may Reid Hoffman: $858 million O Azynga 180 facebook GROUPON 168 150 become even more successful. CEO Jeffrey Weiner: $105 million The company is currently offering 7.84 million shares. Goldman Sachs: Shares $39 million 20 McGraw-Hil: $19 million Of the 7.84 million shares Linkedin is offer- ing, 4,83 million will come from the company and 3.01 million from stockholders. Linkedin co-founder Reid Hoffman is among the stockhold- ers selling them. Reid Hoffman Other big stakeholders that are selling their shares in the IPO are: Goldman Sachs, Bain Capital Ventures and McGraw-Hill Compa- Michelle Yee SEQUOIACAPITAL 19,066,032 shares 15 16,840,309 shares 61% From the company 39% From stockholders nies. 21.4% greylockparmers ownership 18.9% ownership 14,047,978 shares Leading Underwriters 15.8% Jeffrey Winer ownership 10 Mergan Stanley a Ce. Morgan Stanley & Co. Steven Sordello Dipchand Nishar, VP Product & User Experience Bankof Anerica Bank of America SPMorganchase JP Morgan Chase & Co. Others Dual-class structure: 5 BRESSEMER 5,821,839 shares 4,578,253 shares Class A shares Class B shares 6.3% Held by founders and early investors Distributed 5.1% ownership to the public ownership 00000000.. 1 vote per share 10 votes per share 4 Bellweather Facebook, Zynga and Groupon are also rumored to be working on their initial public offerings. But why do they want to go public? What are the varying IPO strategies of each of these companies? Find out: Companies facebook Linkedin can become the major Internet company IPO of 2011, Created in 2004 by founders Mark Zuckerberg, Eduardo Saverin, Dustin Moskovitz and Chris Hughes, Facebook now has more than 600 million users and a revenue of $2 billion (2010). "For us, first and foremost, it's about our mission, which is to connect the world's professionals" said Jeff Weiner, Linkedin's CEO. "An IPO0, being public, raising money, that's really a tactic that helps us ultimately achieve that long term objective." Facebook has been working on raising money for the company, a move that will allow them to delay and better prepare for their expected IPO in 2012. Zynga was created in 2007 by Mark Pincus, Michael Luxton, Eric Schiermeyer, Justin Wal- dron, Andrew Trader and Steve Schoettler. The site boasts more than 215 million monthly active users and revenue of Discount site Groupon was launched in 2008 by crea- tor Andrew Mason. Today there are 70 million members, and the site brought in $800 million in revenue in 2010 Linked in IPO The company refused Google's $6 billion offer in 2010, and has since been rais- $850 million in 2010. Unlike other big social sites, Zynga says it's in no rush to go public - at least not in 2011. ing funding. Groupon's IPO is expected some- Azynga GROUPON time in 2011. 5 Pros Cons Linkedin's success can be measured by its member growth - from 2009 to 2011 the site's number of members more than doubled. Some question the site's growth and wonder if there are as many active users on the site as Linkedin claims. As more people and companies join the site, Linkedin becomes a more valuable resource Some consider Linkedin's valuation to be too high, especially since the company just increased its IPO price range. for recruiters and job candidates. Linkedin has created a platform that allows the site's data to be accessed by API, a valuable characteristic. Linkedin has been criticized for its deci- sion to go with dual-dass stock, which will give public sharehold- ers less than 1% of voting power. The site has the poten- tial to continue grow- ing, as Linkedin's poten- tial user-base is huge: millions of professional workers. As an Internet company, there is always the risk that Linkedin could face cyber attacks and conse- quently have volatile stock The company's CEO and CFO are viewed to be top-notch, a quality inves- tors will be interested in. Linkedin doesn't expect to be profitable in 2011, which could make some investors pause and reconsider the investment. Linkedin's revenue is expected to grow by as much as 70% this year, and is estimated to make as much as $1 billion in revenue by 2014. Information provided by: CREDITSCORE Sources: Brekiri.com | Forbes.com | Dealbook.nytimes.com Techcrunch.com | Mashable.com | Reuters.com Aaacbc.com | Linkedin.com http://www.creditscore.net/