Learning from Rosetta Stone

April 17, 2009


After its blockbuster debut on the New York Stock Exchange, language software maker Rosetta Stone is poised to teach more than just new languages — it may also serve as a model for start-ups looking to go public in the midst of a recession.

In an interview with peHUB, Phil Clough of Rosetta Stone investor ABS Capital shared his thoughts on what made the company such a draw. The IPO earned ABS more than 6 times its initial investment.

What did Rosetta do right? For starters, it offered what ABS managing general partner Phil Clough calls “substance”.  Its online business business model was attractive, and its content and size gave it clout amid a crowded education sector.

But perhaps the most important lesson to take away from Rosetta’s success is that sound business models can trump an ailing economy.

Says Clough: “In our experience, good companies can go public even in tough markets.”

As peHUB noted in its Twitter feed: “Dear Facebook: If Rosetta Stone can go public, so can you.”

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