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In Search of Unicorns: Private IPOs and the Changing Markets for Private Equity Investments and Corporate Control

In Search of Unicorns: Private IPOs and the Changing Markets for Private Equity Investments and... The use of the term “unicorn” to describe private firms that have market valuations of at least $1 billion is widely attributed to Aileen Lee, managing partner of the seed capital‐stage investment firm Cowboy Ventures; see Katie Benner, 2015, “The ‘Unicorn’ Club, Now Admitting New Members,” The Wall Street Journal , August 23. Morgan Bender, Benedict Evans, and Scott Kupor, 2015, “US Tech Funding,” Andreessen Horowitz Working Paper. In their presentation, the authors make the point that PIPOs represent a rebalancing away from the traditional IPO format and that technology IPOs have essentially become a dormant funding tool. CB Insights, 2015, “Data: There are Now Over 9× More Private IPOs Than Actual Tech IPOs,” CB Insights Blog , ( www.cbinsights.com : April 19). Douglas MacMillan and Telis Demos, 2015, “Uber Valued at More Than $50 Billion,” The Wall Street Journal , July 31. First Round Capital's Josh Kopelman wrote, for example: “I don't think we'll fully understand or appreciate the impact of the “private IPO” phenomenon for another decade, or at least until a full cycle plays out … By relying on private financing events as “comps,” we risk pricing new financings (and creating new unicorns) based on http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Corporate Finance Wiley

In Search of Unicorns: Private IPOs and the Changing Markets for Private Equity Investments and Corporate Control

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References (11)

Publisher
Wiley
Copyright
Copyright © 2015 Cantillon and Mann
ISSN
1078-1196
eISSN
1745-6622
DOI
10.1111/jacf.12127
Publisher site
See Article on Publisher Site

Abstract

The use of the term “unicorn” to describe private firms that have market valuations of at least $1 billion is widely attributed to Aileen Lee, managing partner of the seed capital‐stage investment firm Cowboy Ventures; see Katie Benner, 2015, “The ‘Unicorn’ Club, Now Admitting New Members,” The Wall Street Journal , August 23. Morgan Bender, Benedict Evans, and Scott Kupor, 2015, “US Tech Funding,” Andreessen Horowitz Working Paper. In their presentation, the authors make the point that PIPOs represent a rebalancing away from the traditional IPO format and that technology IPOs have essentially become a dormant funding tool. CB Insights, 2015, “Data: There are Now Over 9× More Private IPOs Than Actual Tech IPOs,” CB Insights Blog , ( www.cbinsights.com : April 19). Douglas MacMillan and Telis Demos, 2015, “Uber Valued at More Than $50 Billion,” The Wall Street Journal , July 31. First Round Capital's Josh Kopelman wrote, for example: “I don't think we'll fully understand or appreciate the impact of the “private IPO” phenomenon for another decade, or at least until a full cycle plays out … By relying on private financing events as “comps,” we risk pricing new financings (and creating new unicorns) based on

Journal

Journal of Applied Corporate Finance – Wiley

Published: Sep 1, 2015

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