Recently, TNW brought you findings from a study indicating that if you are a technology firm that wishes to go public, the key requirement is revenues over $100 million. That report noted that recently, profits have become less important than gross receipts as a standard for when a company can attempt to brave the NASDAQ.

However, while more companies are going public at higher revenues with lower, or nonexistent profits, the same source has come forth with a second set of statistics. Its new findings do not replace its former notes, but they do sharpen them.

Here’s the rub: while it is more common for a tech company to go public in the current era with 9 figure revenues, IPOs of smaller firms have outperformed their larger cousins. According to GeekWire, who again brought the findings of Tableau Software’s founder’s blog, IPO Dashboards, to our attention:

[S}maller tech companies, described as having fewer than $100 million in revenue [...] showed gains of 49 percent. That compares to a meager three percent return for the big dogs, weighed down by lackluster performances by companies such as Facebook, Zynga, Pandora and Groupon.

That’s a sharp piece of commentary, as it implies that the larger the firm, the less likely that it is to show real gains. And given that larger firms tend to raise more monies during their flotation, it states implicitly that these bigger firms are tying up substantial capital in a comparatively under-performing investment.

Why is this happening? I suspect that larger firms are able to drive more expansive media cycles (think Facebook’s IPO), and thus command a higher price for their first trade. This can lead to the pricing of their shares perhaps rising too high (think Facebook’s IPO), which can lead to negative real share price performance (think Facebook’s IPO). Smaller firms, with less hype, likely have to price their shares more conservatively, and thus have a larger potential for post-IPO gains, given that some upside is left on the table, as opposed to fully squeezed before the big day (think Facebook’s IPO).

So if you are looking to invest, it might behoove you to look down market to the smaller offerings.

Top Image Credit: Chris Brown