We’ve talked about the potential of “direct listings” as an alternative to IPOs – and a couple of high-profile unicorns have already opted to take this path in lieu of an IPO. Now an “Axios Pro Rata” article says that another important constituency is taking a hard look at direct listings:
Venture capital’s call for more direct listings is growing louder, with a group of big-name investors and tech company executives expected to attend a private, invite-only “symposium” on the matter next month at a hotel in San Francisco. Among those expected to speak are Benchmark’s Bill Gurley, who’s been banging this drum for a while, Sequoia Capital’s Mike Moritz, who just write about direct listings in the FT, and Spotify CFO Barry McCarthy, whose company went public via a direct listing last year.
Why it matters is that there’s a growing investor consensus that the traditional VC-backed IPO process is antiquated and broken — too often benefiting a high-net-worth bank clients and a small pool of mutual and hedge funds, at the expense of issuers.
Big-time investment banks haven’t exactly covered themselves in glory with some recent traditional IPO filings, so if the VCs calling the shots on many deals revolt, the IPO process could be in for a big shake-up.
-John Jenkins, TheCorporateCounsel.net September 23, 2019
