The purpose of this paper is to present a new approach to developing a financial distress prediction model that analyzes factors affecting success or failure of dot-com companies. In a new model, both demand side and supply side categories account for the performance of firms following IPOs. This research uses a logistic regression analysis to build the proposed model. The demand side category includes a market condition factor, while the supply side category includes a funds flow factor. The statistical results show that independent variables such as Gross Profit Margins, Cash Flows, Accounts Receivables, Accounts Payables, and Market Value are significant whereas Stockholders' Equities, Dividends, Capital Expenditures, and Inventories are insignificant.