Name: More Tech IPOs Could Be on the Horizon
Uploaded: 2016-06-16
Duration: 2 min 40 s
Description: Despite not having the best track record

You all know venture capitalist Marc Andreesen. He said, we believe the pendulum has gone too far against going public. And he's talking about tech IPOs. Stephen, what do you think? This is from the guy who swung the pendulum, right? [ LAUGH ] Probably, right? So i think he's got a point right? So most of the recent or a number of the recent big deals have not been equity funding, they have been these debt fundings. And for some of the companies, they got decent deals. But some of them got pretty bad deals, like Spotify right? I mean that was like a sub prime deal in unicorn land, it was terrible. Interest rates going up 10 %. So I think the money is kind of drying up there for these late stage venture capitalists funds. No, I think you're wrong because look at what happened with Uber. Uber and Airbnb just raised some debt. But both debt. Both debt, not equity. That just means that there's so much money available to them. They can get whatever they want. It's both debt. They're gonna be paying, I don't. And the interest rate, I don't think, on either was disclosed, right? But that tells me- Or, no, Uber was like 4. 5 %. But, see, your point- And it's a leveraged loan, right, so- That tells me, though, that they don't need to tap the public markets cuz they can access leveraged loans. [ CROSSTALK ] Yea, but they're gonna- But Steven, your The point is the debt is obviously a different kind of a situation than like a classic investment. Yeah, exactly, it's not the type of thing that these companies usually take on. And when you take on debt, you're diverting money, right? So you gotta pay that interest back. You're diverting money from resources that you could be using to build up your business. That's what The point is. So I think it's getting harder. The fact that they can't find equity, the fact that they have to go to debt is getting harder for them in the private market. But what I will say is, is that there's no pattern seeing here. It's not like the IPO market's gonna be great for these guys. Look at the unicorns have gone public. I know especially in the fintex space. The Socks have gone straight down. And Twitter, right? We're gonna talk about it. So, these tech companies haven't done that well in IPOs. There's a ton waiting to come in, right? There's a lot of uniform, when that door opens, there's gonna be a lot rushing in. It's not gonna be so great in the IPO market, either. Erin, you don't think debt is really that big of a deal. What's with, Well, no and I also think that we should take [ UNKNOWN ] comments, I mean he's very smart, he definitely knows what's happening in the market. I think we should take this into consideration. He is the person who is, his firm is known for driving up the evaluations of these private market companies. I mean, they are known for kind of overpaying, and investing in very high evaluations, and so it serves them to say the IPO market's coming back, because These companies are so valuable that they are not even emanate Targets, really, because they're so big. They're very big companies that can afford to acquire these really over- valued tech companies. They have to go public, and I think he's just hoping to finally see some IPOs. Well, and of course- In his own portfolio. He needs to see his money, he needs to liquidate. He wants his return, all right. He's definitely talking his own book. But the other thing, if you listen closely, what he's talking about Talking about. He's not talking about the traditional IPO. He's talking more about the Facebook IPO right? Where we've got different classes of shares. They're gonna be public companies but they're gonna be protected public companies. [ SOUND ] [ BLANK_AUDIO ]