A Blog by Jonathan Low


Feb 25, 2020

The End Of the IPO As We Know It?

The flip side of the schadenfreude felt by those who believe tech is getting the comeuppance it deserves, are those in Silicon Valley and elsewhere who are aggrieved at the relatively poor performance of many high profile IPOs.

There are rumblings about direct listings and other public offering alternatives, but beneath the grousing, the primary concern of entrepreneurs, venture capitalists and investment bankers is that tech's historic run may be at an end  for now). JL

Mike Hofman reports in the Wall Street Journal:

The 159 companies that went public in the U.S. in 2019 raised $33 billion, down 30% from 2018. IPO critics have long resented the high fees charged by investment banks  to underwrite an IPO. And given the recent travails of post-IPO companies, entrepreneurs and VCs are wondering what those steep fees are getting them. Over the past 10 years, $171 billion in value eluded newly public companies and accrued to Wall Street insiders in the first 24 hours following an IPO. After years of being celebrated as creative visionaries of the economy, the Valley is feeling attacked. 'They're in denial.'
The word go is doing a lot of work there, providing a dissenting view to the axiom that the journey is the reward. In the world of IPOs, the journey — from being a late-stage, well-funded private company to becoming a public company — represents the annoying and potentially hazardous part of the great American entrepreneurial success story.


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