2019 is poised to be the biggest year for U.S.-listed initial public offerings since the dotcom bubble.

That was one of the findings in a piece I contributed to the recently published Fortune 500 issue of the magazine. As Kathleen Smith, cofounder of Renaissance Capital, an IPO-tracking firm, told me: “We think we can get to over $100 billion in issuance,” or money raised by capital market debutantes. The last record was set in 2000, when companies pulled in $97 billion.

This projected record-breaking year has been propelled, in part, by so-called unicorn tech companies. Venture capitalists, looking to wind down their outstanding funds, have at long last dug their heels into the fattened flanks of their portfolio companies, compelling them to list on stock exchanges, though years later than usual. The urgency to raise money from public investors had been forestalled by a new breed of deep-pocketed private investors ready to shower firms with ample, late-stage funding. The trend is perhaps best epitomized by the mega-sized cash injections of Softbank impresario Masayoshi Son, the Don Corleone of Silicon Valley, whose offers, doled out of a $100 billion, Saudi-soaked “vision fund,” are not to be refused.

The rise of Goliaths has made life more difficult for the Davids. Barry Silbert, who runs Digital Currency Group, a cryptocurrency conglomerate, told Fortune during an appearance on a recent episode of Balancing The Ledger that, since selling SecondMarket, a marketplace for people to trade private shares in startups, to NASDAQ in 2015, he has kept his distance from, and been disappointed in, the world of public equities. “I continue to think the public markets are broken in that they’re no longer accessible for smaller, fast-growing companies,” he said. “I think that’s a shame.”

How will the financial industry adapt to such toughened conditions? Like many techno-optimists, Silbert has set his sights on software solutions. He is looking, unsurprisingly, toward innovations sprouting from blockchains and digital currencies. Binance, the cryptocurrency exchange giant, has been testing out “IEOs,” or initial exchange offerings, a descendent of the speculative token sale or initial coin offering (ICO), for instance. (“I wasn’t a fan of ICOs,” Silbert noted on our show. “But I do think that experimentation like that is important,” he added, describing himself as “philosophically supportive.”)

Regulators are less sure. Especially in the U.S., recent guidance has forced entrepreneurs into tough spots. Jeremy Allaire, CEO of Circle, a cryptocurrency outfit that recently laid off 30 employees, said he was “deeply frustrated” by the U.S. Securities and Exchange Commission’s stance on digital assets. Fred Wilson, an investor at Union Square Ventures, called U.S. securities laws “very damaging policy” in a post on Twitter. Kik, a chat app on whose board Wilson sits, has vowed to battle the SEC over a $98 million ICO the startup held in 2017. (The company is soliciting cryptocurrency donations to pay legal costs associated with the fight.)

It’s unclear what the future of capital formation, public markets, and equity investment will hold, but there are guaranteed to be big changes—or at least a blossoming of alternatives—in the years ahead. As Silbert forecasts, over the next decade or so, the financial industry “will look a lot different.”

The Ledger team tends to agree. Indeed, we’ll be discussing the multifarious possibilities with the industry’s top minds at Brainstorm Finance, our invitation-only, seaside retreat in Montauk later this month. Do email us if you’re interested in an invitation.


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Robert Hackett


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