Typically, when a startup goes public after reaching a billion-dollar plus valuation, it’s considered a “win” for that community. But what happens when that billion-dollar company is no longer a unicorn?

Earlier this month, Domo, a Utah-based business analytics startup founded by serial entrepreneur Josh James, filed for an IPO. The milestone should have been a celebration for the Utah tech community, as Domo was valued at $2.3 billion just last year.

But Domo’s S-1 revealed quite a few blemishes. For starters, the company said it lost $176.6 million in 2017 and only had $72 million in cash on hand. If it didn’t get more financing by August, the company would have to “implement plans to significantly reduce operating expenses.” Reporters and analysts also criticized Domo for spending on money on things that benefited James and his family, such as spending $700,000 last year to lease an aircraft James owns.

This week, Domo released a revised S-1, which slashed its pricing range to $19 to $22. With this new pricing range, Domo’s market cap could be about $511 million when it ultimately goes public — down nearly $1.8 billion from its highest valuation. Domo also announced that this month it terminated its agreement to lease the aircraft owned by James, likely in response to media criticism.

What should other startup communities take away from this? That no matter how much promise a startup shows, it always has the potential to fizzle out before reaching the IPO stage. And that startups in the Heartland are just as prone to falling victim to Silicon Valley excess as those in the Bay Area.

Thanks for reading, and as always, please send me your thoughts via email. You can also sign up here for VentureBeat’s Heartland Tech newsletter to get this column in your inbox weekly.

Anna Hensel
Heartland Tech Reporter

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