Why Groupon Didn't Screw Up in Resisting Buyout Offers

It's not often that you can turn down $6 billion dollars and still come out ahead, but that's exactly what it looks like Groupon just did. In the world's worst-kept secret, the Chicago-based Groupon filed paperwork Thursday to raise up to $750 million in an IPO. The filing does not specify how many shares will be available, but we do know the company will use a two-tiered stock approach, keeping the early investors and founders in key power spots within Groupon. Just last December, Groupon turned down $6 billion (yes, with a B) from Google, which was attempting to buy the upstart start-up. By the time Groupon goes public, they could potentially be worth far more than $6 billion. Either way, the three Groupon co-founders (CEO Andrew Mason, Eric Lefkofsky and Brad Keywell) are set to be incredibly wealthy, in particular if the company's valuation matches its revenue growth over the past year. Groupon went from $30.47 million in revenues in 2009 to $713.4 million in 2010, perhaps the greatest one-year growth rate in the history of the world. Groupon had 37 employees two years ago and now employs over 7,000 employees — the sort of growth that other start-ups dream of at night. They've also gone from 2 million users to 85 million, the sort of growth that keeps the IT team awake (working) well into the night. The rapid growth has been Groupon's focus, as the company prefers to grow quickly into this emerging marketplace while they hold the dominant position, and then focus on turning a profit in the near-term future. This IPO is not the only funding that Groupon has received. To date, they have already raised $1.1 billion in private financing.