Throughout the 21st century, a disproportionate share of the economic growth manifested in the United States has come from Silicon Valley, where skilled teams of high-tech innovators have worked to change the world. But in many instances, the staff members driving all that change haven’t been able to fully reap the rewards of their labor. That’s because the companies they’ve worked for have been privately owned. That may be changing soon, though. According to the New York Times, venture capitalists in Silicon Valley are preparing for a wave of initial public offerings that should bring windfalls for the tech industry.
Already in 2018, we’ve seen the start of a large-scale movement toward more big tech firms going public. Dropbox and Spotify are among the biggest companies that are now publicly traded as of this year. All told, tech IPOs have raised more than $7 billion in new revenue, more than 2015 and 2016 combined.
“At all levels, there are more and more companies who are thinking about, should we go public this year or next?” said Noah Wintroub, vice chairman of investment banking at JPMorgan Chase. “You’ve got an environment now that’s conducive to asking that question, and also a lot of companies that have scaled up to the point where they can go now.”
A quick read of the tea leaves reveals that more big names in the Valley will be heading toward IPOs soon. The Times noted that Uber CEO Dara Khosrowshahi has already discussed his desire to go public in 2019, and Lyft has similarly held talks with investment banks about the idea. Additionally, Airbnb has begun bringing independent directors onboard, a clear signal of an intent to go public soon.
There’s no doubt that an IPO can bring a major payday for a successful tech firm and its employees. Take Zuora, for example.
Zuora is a software firm that went public this year and saw its stock price soar 43 percent on just the first day. Venture capitalist Jason Pressman had initially invested $17 million into growing Zoura; his share is now worth roughly $150 million.
“Not bad,” Pressman told the New York Times. “Not bad at all.”