[carlineng]

Practically speaking, how is "raise money on private market, then quickly go public via Direct Listing" different from a traditional IPO? Presumably the late stage private investors get the company at a steep discount relative to what would be available to retail investors, so it doesn't seem that different from an IPO where the majority of shares go to select institutional investors. If the shares pop 50% after the Direct Listing, then couldn't one argue that the company left money on the table during the pre-Direct Listing private round?

[joschmo]

You've astutely noted the difference between what people think is happening in a direct listing and what actually happens.

People think founders are sticking it to Wall Street. In reality, the exact same mechanics are playing out with an IPO but without any downside protection for the company.

[cracker_jacks]

> The NYSE now offers companies the option to raise money in a direct listing after the U.S. Securities and Exchange Commission approved it in December.

Doesn't the new NYSE listing format 'stick it to wall st' or at least institutions that get early access to IPOs?

[nitrogen]

I think they're saying that the late-stage private investors are the ones who get the early access.

[bradleyjg]

Yes. The only way to avoid the “pop” is to not need new money. (Edit: if you can hold out a year on current cash you can do a secondary offering after the DL.)

Instacart already gave it away to whoever participated in this $265 million private fundraising round.