As money, real cash, becomes as guzy as a dance of veils, many pro investors stay away. If the management is not attractive, if there is nothing behind the business plan, it does not matter that the stock is hot. We just don't participate. That's an important difference between likely success and failure, says Ian Ainsworth. For an IPO, information on accounting may be scanty, but it's vital to know if the firm takes or plans to take an aggressive view of sales.
Deferred revenue is okay if the firm plans deliveries long in the future.
If a firm is Web-centric, you really want to know what fraction of sales are really made on the Web. And watch out for receivables going up as fast as what the company calls sales. If receivables rise at the same rate, it means customers are not paying. It is especially important to see venture capital people behind the company who have shown expertise in building other companies.