Pumping up startups with money in the early stages can lead to the collapse of the IPO market
Recently, technology companies are developing at an incredible pace. They can increase the number of users to 100 million faster than ever. And this figure is one of the key indicators of the development of such companies.
“Technology companies scale and grow in valuation much faster and in the earlier stages of the life cycle than ever before,” says Dan Deese of Goldman Sachs .
In such conditions, investment banks are forced to change their approach to working with technology companies.
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Companies now require their services in the early rounds of financing. Although in the past they were required only at the IPO stage. Now the techno company can easily afford to remain private, entering the world market.
But Microsoft began working with Goldman Sachs just before the 1986 IPO, cites a counterexample Dan Dease.
David Wow of Credit Suisse agrees that the time it takes companies to reach 100 million users has been significantly reduced.
Formation of a company’s valuation often takes place long before it becomes public. Wow mentions Google and Amazon , as an example of the previous scheme - the growth of the assessment after the IPO. And the Alibaba holding is an example of a new development scheme. By the time the 2014 IPO was launched, the holding was already valued at approximately $ 160 billion.
The global IPO market this year fell to $ 32.72 billion. Last year, its volume reached $ 80.86 billion.
According to Wow, it is the early increase in the assessment of techno-companies is the main reason for pumping money at the initial stages of development, reports Business Insider. Therefore, modern private companies do not seek to become public. They already have enough funds for development.
In addition, given the unstable situation on the stock exchanges, entering the IPO for the company is a bold, but risky step. As practice has shown, in such periods, many startups with an estimate of more than $ 1 billion do not dare to go public. According to the company Dealogic, since the beginning of this year, only 19 companies in the United States held an IPO. Last year, for the same period of time, 41 companies became public. However, Pure Storage and Square are exceptions. Both are preparing to go IPO this year.
On September 26, Megamind wrote that by the end of the year the Australian IT company Atlassian plans to develop an IPO for the legendary Task Manager JIRA.
“Technology companies scale and grow in valuation much faster and in the earlier stages of the life cycle than ever before,” says Dan Deese of Goldman Sachs .
In such conditions, investment banks are forced to change their approach to working with technology companies.
')
Companies now require their services in the early rounds of financing. Although in the past they were required only at the IPO stage. Now the techno company can easily afford to remain private, entering the world market.
But Microsoft began working with Goldman Sachs just before the 1986 IPO, cites a counterexample Dan Dease.
David Wow of Credit Suisse agrees that the time it takes companies to reach 100 million users has been significantly reduced.
Formation of a company’s valuation often takes place long before it becomes public. Wow mentions Google and Amazon , as an example of the previous scheme - the growth of the assessment after the IPO. And the Alibaba holding is an example of a new development scheme. By the time the 2014 IPO was launched, the holding was already valued at approximately $ 160 billion.
The global IPO market this year fell to $ 32.72 billion. Last year, its volume reached $ 80.86 billion.
According to Wow, it is the early increase in the assessment of techno-companies is the main reason for pumping money at the initial stages of development, reports Business Insider. Therefore, modern private companies do not seek to become public. They already have enough funds for development.
In addition, given the unstable situation on the stock exchanges, entering the IPO for the company is a bold, but risky step. As practice has shown, in such periods, many startups with an estimate of more than $ 1 billion do not dare to go public. According to the company Dealogic, since the beginning of this year, only 19 companies in the United States held an IPO. Last year, for the same period of time, 41 companies became public. However, Pure Storage and Square are exceptions. Both are preparing to go IPO this year.
On September 26, Megamind wrote that by the end of the year the Australian IT company Atlassian plans to develop an IPO for the legendary Task Manager JIRA.
Source: https://habr.com/ru/post/295144/
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