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Considering that early IPO trading is fairly limited due to lockup, and IPO process itself restricted to high-net-worth clients (index funds normally don't part
by prostoalex 7y ago
Considering that early IPO trading is fairly limited due to lockup, and IPO process itself restricted to high-net-worth clients (index funds normally don't participate until much later), I'd say that public markets provide a fairly efficient price discovery mechanism.
It's quite rational for VCs to extract maximum value for themselves and their clients, and similarly rational for IPO buyers to push back on proposed valuations.
- Analemma_ 7y agoThere are some pension funds which have VC exposure though. This is the one that really steams me, because when pension funds go bust the taxpayer is legally required to pick up the tab. We're literally paying for VCs' lies.
- prostoalex 7y agoBut those pension would've been exposed at previous rounds' price, not the IPO price. An aggressively priced IPO gone bad will likely still net them a positive ROI.