Josh Arnold
Long/short equity

Keating Capital: A Business Model Doomed To Fail


Keating Capital (KIPO) is a business development company that specializes in “Pre-IPO” companies in the technology, clean tech and internet/software industries. The basic premise behind this company is that it finds companies in its three areas of “expertise” that it deems: high growth, $10+ million in annual sales, committed to an IPO in 18 months, and shows a potential for significant return on investment. Apart from that, the underlying premise of this business is that Keating believes a company that is private is worth half of what the same company would be worth public. This is not a joke; this is what Keating calls its “private-to-public valuation arbitrage” and forms the foundation for its investment strategy.

Keating believes it

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