ServiceTitan IPO thoughts

I’m “back” working again full time and it does feel good to be back on the grind. My plan is to really get after it for the next 3 weeks and close out the year strong. It’s going to be a challenge for myself with a newborn here, but one that I’m excited to take on. Life isn’t getting any easier so might as well rip the bandaid off and try to adjust to the new normal.

On the news front, the latest in the VC and private company space is ServiceTitan’s S1 disclosing the compounding ratchet. There’s a lot of interesting commentary out there and I don’t feel like writing too much about it at this point.

What I will say is that I would love to get the inside scoop on the negotiation of these funding rounds. Obviously there’s a reason why ServiceTitan agreed to let investors have a compounding ratchet here in their term sheet.

Was the company really strapped for cash that they needed to get something done? Were the executives against taking a further down round and instead had an optimistic view on the market? I’d guess there was a lot more to the story than what’s on the surface.

The strategy and reasoning here is what’s unfortunately missing in the discussions. Undoubtedly 2022 and 2023 was a rough time for startups. Many of them were being forced term sheets at high valuations and it was hard for them to say no. Then when the market crashed, their hands were forced.

There’s unfortunately a lot of negative sentiment right now given the talks, but even with the dilution of additional shares, if it happens, it could still be a successful IPO. So I remain positive for my friends and investors at ServiceTitan.