With the Economy Uncertain, Tech ‘Unicorns’ Rush Toward I.P.O.

Those attitudes have shifted as investors and tech employees have increased pressure on the companies to go public so that they can cash in their shares.

“The forcing factor is, how do you deal with issues of employee retention?” said Rick Heitzmann, a managing director at FirstMark Capital, which is an investor in unicorns such as Pinterest and Airbnb.

But the seesawing stock market, a trade war with China and other countries and uncertainty over the direction of the economy are all now weighing on I.P.O. decision-making. Few executives want to take their companies public when investors’ appetite for shares may be ebbing.

“Companies that were waiting for everything to be perfect before going public might have been better off going when things were good enough,” Mr. Heitzmann said.

Sandy Miller, a venture capitalist at IVP, said several companies were meeting with potential investors far ahead of filing for an I.P.O., in what are known as pre-roadshow events. “That’s the only way to really know what kind of receptivity you’re going to have” from the public markets, he said.

Mr. Miller said that he expected a robust year for I.P.O.s next year, but that companies may not want to wait until too late in the year to file. “There are certainly some storm clouds on the horizon,” he said.

Some unicorns are sidestepping the unpredictability altogether. WeWork, an office rental company valued at $45 billion, has been widely named as an I.P.O. candidate. But in November, the company agreed to sell an additional $3 billion of shares to its main investor, SoftBank’s Vision fund. That deal has allowed WeWork to push plans for a public listing further into the future, said a person familiar with the company.

Article source: https://www.nytimes.com/2018/12/06/technology/lyft-uber-ipo.html?partner=rss&emc=rss