| > In a sign of wariness among pre-IPO investors, an analysis of funding rounds by law firm Fenwick & West LLP in March found that 30% of private companies valued at $1 billion or more promised a specified IPO price. In some cases, the companies agreed to give additional equity to investors if the IPO price wasn’t met. This is not necessarily a "sign of wariness." The investors are just doing what reasonably sophisticated investors do: protecting against downside risk. As long as the companies they've invested in can get out to market, the investors really can't lose. The companies themselves and other shareholders lose. > Dropbox received the $10 billion-valuation offer from BlackRock after just two days of investor meetings, said a person familiar with the fundraising. The company and its valuation don't matter. The terms of the deal do. You can make enormous profits investing in bad companies if you negotiate great terms. If BlackRock structured its investment well, which it almost certainly did, Dropbox could go public with a $5 billion valuation and BlackRock would still achieve the desired return. As I wrote in a previous comment, it's kind of amusing that so many in Silicon Valley rail against Wall Street and "financial engineering" when the biggest "winners" of this tech boom are products of Wall Street and "financial engineering."[1] [1] https://news.ycombinator.com/item?id=10403067 |
A lot of people have an irrational hatred of high finance.