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Why are IPOs so important? Is this what investors are looking towards primarily for ROI? I suppose SV IPOs and the housing market?
by Axiverse 10y ago
Why are IPOs so important? Is this what investors are looking towards primarily for ROI? I suppose SV IPOs and the housing market?
- kspaans 10y agoGenerally speaking, without an IPO, all of the employees that have equity have no way of selling it and cashing out their earnings[0]. And then there is all of the prestige and hype around an IPO (if it goes well). 0 - Sure, sometimes companies will allow employees to sell their shares to someone, usually an existing investor.
- buckhx 10y agoSome larger private companies buy back shares as well to help employees with liquidity. It still sucks being relatively cash poor as an employee for multiple years when your company is valued at billions of dollars.
- sbuttgereit 10y agoDon't forget acquisitions though, you don't need to be public to be acquired and those deals also cash out vested employees. We can talk about if that's favorable or not relative to an IPO, but public offering isn't the only way out. Actually, I expect acquisition is probably a more common exit for employees than IPOs.