The flopping of the IPOs: Tech's biggest investors came to San Francisco for a major startup conference, and one topic stole the show
The Disrupt conference in San Francisco, organized by Tech Crunch, is a longstanding showcase for cutting-edge startups and products. But the star of this year's show was not a buzzy new app for swapping selfies or a new cloud platform; it was an arcane process for companies to sell their stock to the public.
Some VCs at the event were quick to point the finger at financial institutions like JPMorgan and Goldman Sachs — these banks overhyped companies like Uber and Lyft, running up private valuations so much ahead of the IPOs that there was nowhere for them to go on the public markets but down. In all, direct listings were discussed in at least three major panels throughout the first two days of the Disrupt conference. In a direct listing, a company simply lists its shares on a public exchange and the stock begins trading. Unlike in an IPO, there is no bank underwriting the offering, setting a price and selling it to institutional shareholders. The startup does not actually raise any money in a direct listing, but its employees and early investors can sell their shares right away.
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