Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave


Dropbox, which made its initial public offering in March, and Spotify may be at the start of a wave of I.P.O.s for highly valued and recognizable start-ups.

SAN FRANCISCO — Jason Pressman spent Thursday morning cheering from the balcony of the New York Stock Exchange as shares of the software firm Zuora, which he backed in 2008, began trading.

By the market’s close, Zuora’s stock had soared 43 percent, making his venture capital firm’s $17 million investment in the company worth roughly $150 million.

“Not bad at all,” Mr. Pressman said by phone on Thursday night, before heading to a celebratory dinner with about 60 people at a pricey Italian restaurant in Chelsea. Mr. Pressman, a venture capitalist at Shasta Ventures, said he had been up much of the night before but still expected to raise a few glasses. “I’m running a little bit on adrenaline.”

Mr. Pressman and many other Silicon Valley venture capitalists expect the windfalls to continue. Many of these investors, who back tiny start-ups with the hope that they will someday go public or be sold for nine- or 10-figure sums, have enjoyed enormous paper gains in recent years. But few have cashed in, because their fast-rising companies, like Uber and Airbnb, have remained private.

That finally may change. Investors, bankers and analysts said they expected a wave of initial public offerings to bring some of the most highly valued and recognizable start-ups to the public market over the next 18 to 24 months — and billions of dollars in returns to their executives and investors. The potential bonanza would follow years of waiting as a few dozen companies amassed valuations without precedent in the private market.

Already, 2018 has gotten off to a fast start. Two of the biggest start-ups still sitting on the sidelines — Dropbox, an online file storage company, and Spotify, the streaming music service based in Sweden — successfully went public over the past month. Tech I.P.O.s have already raised more than $7 billion this year — more than all of 2015 and 2016, and more than half the $13 billion they raised last year, according to the market-data firm Dealogic.

The bullishness is a far cry from 2017, when Snap, the maker of Snapchat, went public — and then promptly fizzled. Blue Apron, which delivers meal kits, also saw its share price collapse after its I.P.O. last year.

The tide has turned, venture capitalists said. “I talk to bankers all the time and they’re like: ‘Dude, we have stuff coming down the pike. There’s a bunch of offerings teed up,’” said Rob Hayes, a general partner at First Round Capital, who led a $1.5 million funding round in Uber in 2010 that valued the company at $4 million. Uber is now worth $68 billion.

Dara Khosrowshahi, the chief executive of Uber. Uber, Lyft and Airbnb are among the popular picks to go public in the near future.

Some of the biggest-name privately held tech companies have recently made moves that position them to go public…

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Peter Bordes

Exec Chairman & Founder at oneQube
Exec Chairman & Founder of oneQube the leading audience development automation platfrom. Entrepreneur, top 100 most influential angel investors in social media who loves digital innovation, social media marketing. Adventure travel and fishing junkie.
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