The conventional wisdom in the world of tech companies holds that you want to put off bringing on public investors for as long as possible. Because of the long-term nature of many strategies that tech firms must follow in order to incubate their businesses in the early stages and ensure long-term success, it is best not to have to justify every decision in terms of its impact on this quarter’s numbers.
However, GreenSky Credit founder and CEO David Zalik believes that his company is ready to take on the added burdens of public ownership. Zalik says that his company has worked out almost all of the kinks in its business model and has largely become a mature company. He believes that the benefits of going public, including raising a great deal more operating capital with which he plans to continue the firm’s expansion, far outweigh the meager risks that a mature, proven company like GreenSky Credit may incur.
Zalik founded GreenSky Credit back in 2006. He had become aware of the fact that may home-improvement projects were ultimately falling through due to the fact that homeowners were severely underestimating the final price tag of the project that they sought to undertake. But Zalik immediately recognized this as a situation where everybody could win.
The contractors who were pitching jobs were losing huge sums of money when these deals fell through. They would stand to benefit greatly. At the same time, the homeowners themselves were not actually gaining by walking away from these deals even when the prices were radically higher than they had anticipated. That’s because the majority of high-end home improvement projects end up adding more value to the home than they ultimately cost. At the same time, the majority of GreenSky Credit customers are prime borrowers, with an average GreenSky Credit client having a FICO score of 760.
By providing instant bridge loans with great terms of up to six figures, GreenSky Credit has been able to find a niche market where its services are creating tremendous value for everyone involved. This makes GreenSky’s eventual IPO a rich opportunity for any investor.