So, Brightcove have filed their S1 - something I did for Narrowstep almost before they were founded.
Going public as a loss making company is risky, to say the least - $27m of sales and just under $13m of losses in the past half year is far from a stable business plan. Indeed, it skews the market horribly. It says that investment is more important than business or entrepreneurship. that money can win by its own virtue, over any industry or ability.
The other internet video companies on public markets have dreadful track records. KIT may be stable now, but they've diluted so many times that an original investor in their IPO would have lost all their money. Likewise for Narrowstep, of course, where an American investor, David McCourt, staged a coup and utterly destroyed a public company with no recourse as it was set to become profitable. Nevertheless, I was myself guilty of taking a loss making company public at the behest of my shareholders (but, incidentally, didn't raise new investor money in doing this).
Perform went public more recently in the UK and the shares have proven to be disappointing, losing around a third of their value on the back of a massive valuation.
Worst of all, if investors want to know anything about Brightcove, they should know that founder Jeremy Allaire sold around 35% of his shares for $4.86 million last year. Hardly a vote of confidence before an IPO, especially from such a seasoned and rich entrepreneur.
The world of video management systems is full of loss makers, from Kyte to Ooalya, to KIT to Brightcove.
Meanwhile, I and my colleagues are quietly building a highly profitable business with the same model at VidZapper.
If Brightcove is worth $100m or more, and likewise the heavily loss making KIT Digital, what is a profitable business in this sector with major clients and similar technology, like VidZapper, worth ? Frankly, it's a game I no longer play, and anyone playing it should remember - caveat emptor. Brightcove is a bad investment with nowhere to go.
I always believed that a good way of valuing a loss making company is to take its revenues, less its losses ($15m in the case of Brightcove), and use this as a valuation point. If you're raising $50m this is serious dilution!
Further analysis shows $50m spent on marketing in three years. I'm not sure if any of this covers the cost of subsidising non profitable services, or putting profitable services out of business.