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The post on A16Z can be characterized as "talking one's own book" [1] While convenient to cherry-pick MSFT as an example, there was also countless wealth lost

by asanwal 13y ago

The post on A16Z can be characterized as "talking one's own book" [1] While convenient to cherry-pick MSFT as an example, there was also countless wealth lost in the dot com explosion (Webvan, eToys, Pets.com, etc) Yes going public today is harder and that means companies generally have to have a better answer to "how will you make money (profitably)" than they once did. And that is probably a good thing. It's also surprising that venture capitalists who have on the whole been unable to beat the S&P500 think that the layperson investing in tech companies would fare so well. [1] http://invest.yourdictionary.com/talking-one-s-book http://invest.yourdictionary.com/talking-one-s-book

_delirium 13y ago
Groupon and Zynga are two more recent big examples.
- muzz 13y ago
  Examples or counter-examples? I.e., are you saying that the public should have been allowed to invest in Groupon and Zynga earlier?
x0x0 13y ago
see also Keith Rabois' answer on the subject [1]; sorry for the quora link but it's worth it. tl;dr: reasons given to avoid ipo include lower speed/innovation (counterexample: apple), problems with short-term market expectations (cex: google), outside capital not required, maintaining a low profile, and sox compliance. Keith asserts that the real reasons are (a) incorrect assessments of above; (2) BoD issues, and (3) -- the important reason -- private company valuations are detached from reality and have been substantially inflated, so companies have to defer exits for years until their business can actually support the valuation. [1] http://www.quora.com/What-are-some-of-the-main-reasons-that-tech-companies-haven-t-tended-to-IPO-much-over-the-last-few-years http://www.quora.com/What-are-some-of-the-main-reasons-that-...
- codezero 13y ago
  Rather than (or in addition to) apologizing for a Quora link, just add ?share=1 to the end of the URL so that none of the sign-up call to action or answer blurring appears.
  - x0x0 13y ago
    thank you, that's awesome
pmarca 13y ago
Actually there's a good case to be made that Scott is talking against our own book. We have entirely private money locked up for 13+ years, we benefit from longer private holding periods. Whether that's good for the industry or the country are separate questions.
- absherwin 13y ago
  You can fix this without government intervention: Launch an a16z ETF. It could help you as well because you could secure more favorable terms if you so desired to offset the additional work. This may yield higher returns to investors than they could otherwise receive but, if so, it's only because they underestimate you. If the return on funds invested with you is expected to be higher, the ETF's price will increase until the perceived risk-adjusted return is equal to that in the market. What causes the types of entities who receive above average returns through nontraditional vehicles to achieve them is some combination of the the higher cost of raising that money, more limited availability and social convention.
  - rscale 13y ago
    I was just thinking that this article could serve as the opening shot in an effort to create venture vehicles for retail investors.

by asanwal 13y ago

_delirium 13y ago

Groupon and Zynga are two more recent big examples.

muzz 13y ago
Examples or counter-examples? I.e., are you saying that the public should have been allowed to invest in Groupon and Zynga earlier?

x0x0 13y ago

see also Keith Rabois' answer on the subject [1]; sorry for the quora link but it's worth it. tl;dr: reasons given to avoid ipo include lower speed/innovation (counterexample: apple), problems with short-term market expectations (cex: google), outside capital not required, maintaining a low profile, and sox compliance. Keith asserts that the real reasons are (a) incorrect assessments of above; (2) BoD issues, and (3) -- the important reason -- private company valuations are detached from reality and have been substantially inflated, so companies have to defer exits for years until their business can actually support the valuation. [1] http://www.quora.com/What-are-some-of-the-main-reasons-that-tech-companies-haven-t-tended-to-IPO-much-over-the-last-few-years http://www.quora.com/What-are-some-of-the-main-reasons-that-...

codezero 13y ago
Rather than (or in addition to) apologizing for a Quora link, just add ?share=1 to the end of the URL so that none of the sign-up call to action or answer blurring appears.
- x0x0 13y ago
  thank you, that's awesome

pmarca 13y ago

Actually there's a good case to be made that Scott is talking against our own book. We have entirely private money locked up for 13+ years, we benefit from longer private holding periods. Whether that's good for the industry or the country are separate questions.

absherwin 13y ago
You can fix this without government intervention: Launch an a16z ETF. It could help you as well because you could secure more favorable terms if you so desired to offset the additional work. This may yield higher returns to investors than they could otherwise receive but, if so, it's only because they underestimate you. If the return on funds invested with you is expected to be higher, the ETF's price will increase until the perceived risk-adjusted return is equal to that in the market. What causes the types of entities who receive above average returns through nontraditional vehicles to achieve them is some combination of the the higher cost of raising that money, more limited availability and social convention.
- rscale 13y ago
  I was just thinking that this article could serve as the opening shot in an effort to create venture vehicles for retail investors.