10 Best IPOs for Entrepreneurs to Learn From in 2024

For many startup founders, taking their company public is the ultimate milestone – a sign that they‘ve truly "made it." But the path from idea to IPO is notoriously challenging. Statistics show that over 90% of startups fail before reaching an initial public offering.

Despite the odds, we‘ve seen a wave of high-profile tech unicorns make their public market debuts in recent years. Alibaba‘s record-breaking $25 billion raise in 2014, Meta‘s (formerly Facebook‘s) rocky but ultimately successful listing, and Airbnb‘s pandemic-era pop are just a few of the IPOs that captured the business world‘s attention.

While those massive listings get the headlines, there are valuable lessons to be learned from IPOs of all sizes. In this post, we‘re going to do a deep dive on DoorDash‘s December 2020 public offering. The food delivery app‘s IPO provides a masterclass in what it takes to successfully transition from private to public and thrive under the scrutiny of public market investors.

The DoorDash Story: From Dorm Room to NYSE

Like many notable startups, DoorDash traces its origins back to Stanford University. The concept for the company, originally called Palo Alto Delivery, was hatched by four students: Tony Xu, Stanley Tang, Andy Fang and Evan Moore.

Xu and his co-founders set out to solve a problem they experienced firsthand in college: a lack of food delivery options in their area. The team built an app to connect customers with restaurants via a network of delivery drivers (or "Dashers"). Little did they know their solution to a seemingly simple problem would evolve into a multi-billion dollar business.

In the seven years between founding and IPO, DoorDash raised nearly $2.5 billion in venture funding. The company achieved coveted unicorn status in 2018 and entered 2020 with a valuation of around $16 billion.

Along the way, DoorDash hit some other key milestones:

• Reached 1 million Dashers and 18 million customers
• Expanded to over 4,000 cities in the US, Canada and Australia
• Partnered with 90% of the top 100 restaurant chains in the US
• Launched DashPass, a $9.99/month subscription for unlimited deliveries
• Moved beyond restaurants into convenience, grocery, pet supplies and other verticals

When the COVID-19 pandemic forced the closure of restaurant dining rooms, demand for DoorDash‘s services soared. The company recorded $2.5 billion in revenue in the first 9 months of 2020, more than double its total from the prior year. Seizing on the momentum, DoorDash announced plans to go public in November 2020.

Dashing Through the IPO Finish Line

On December 9th, 2020, DoorDash listed on the New York Stock Exchange under the ticker DASH. The company priced its shares at $102, well above the initial proposed range of $75-$85. And once trading began, the stock took off.

DoorDash opened its first day as a public company at $182 per share, a 78% jump from the listing price. Shares closed at $189, delivering an 86% gain to IPO investors. The offering raised a total of $3.4 billion, earning DoorDash the distinction of 2020‘s third-largest IPO behind only Airbnb and Snowflake.

With a fully-diluted valuation of $72 billion at the end of the day, DoorDash was worth more than prominent companies like Chipotle, Kraft Heinz and Ford. Not bad for a business that started out delivering food to Stanford dorms just seven years prior.

3 Lessons Every Founder Can Learn From DoorDash

So what can entrepreneurs take away from DoorDash‘s journey and impressive public debut? Here are three key lessons:

1. Develop products that solve real, widespread problems

DoorDash addressed major pain points for both consumers and restaurants. Customers wanted a wider selection of delivery options, while eateries needed help expanding their reach and sales.

As the company grew, the team continued to identify adjacent opportunities. With moves into convenience store and grocery delivery, DooDash emerged as an "everything delivery" leader that could meet a range of local commerce needs.

The takeaway – rather than chasing fads, focus on building something that eliminates friction and makes life easier for your target customers. Continually look for ways to expand your addressable market and provide more value.

2. Forge strategic partnerships to accelerate growth

DoorDash secured partnerships with national chains like Chipotle, McDonald‘s and Walmart to rapidly scale its footprint. The company also teamed up with leading consumer brands to offer grocery and household essentials delivery.

These collaborations gave DoorDash credibility and exposed the platform to massive new customer bases. Importantly, they also enabled DoorDash to access valuable data for improving its algorithms and efficiency.

Startups should always be on the lookout for potential partnerships that are a win-win. The right deals can dramatically accelerate your timeline and expand your total addressable market.

3. Craft a compelling narrative for investors

Ultimately, a successful IPO is all about storytelling. You need to convince investors that your company has a massive market opportunity, a sustainable competitive advantage, and a path to long-term growth and profitability.

DoorDash checked all of those boxes in its IPO prospectus. The company cited a total addressable market of $300+ billion in the US alone when accounting for its expansion into new verticals. DoorDash also emphasized its market share gains and industry-leading sales and efficiency metrics.

Perhaps most importantly, DoorDash painted a picture of an experienced leadership team uniquely equipped to execute on the opportunity ahead. CEO Tony Xu‘s founder story and the business backgrounds of his exec team inspired confidence.

Whether you‘re pitching VCs or working towards an IPO, never underestimate the power of a compelling narrative. Define your company‘s mission, highlight your strengths and potential, and present a bold vision for the future.

The IPO Journey Never Ends

Of course, going public isn‘t the end of the road – it‘s the beginning of a company‘s next chapter. Like many 2020/21 IPO darlings, DoorDash has seen its stock price decline from its post-offering peak as market conditions shifted.

But zooming out, DoorDash‘s story is still being written. And the entrepreneurial lessons from its early years and IPO remain powerful and instructive. With the right product, partnerships, and pitch, you too can build something that captures the business world‘s attention and achieves long-term success.