The What, Who, and When with IPOs

The a16z Show

a16z

Technology, Culture, Disruption, Science, Entrepreneurship, Software Eating The World, Business, Innovation

4.2 • 1.2K Ratings

🗓️ 29 January 2024

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

In 2022 and 2023, US IPOs hit decade lows after the record high of 2021. Now, in 2024, will the IPO window reopen? In this episode, we revisit a conversation with Jeff Jordan, former CEO of OpenTable, and J.D. Moriarty, the former Head Managing Director and Head of Equity Capital Markets at Bank of America Merrill Lynch. Joined by Sonal Choksi, the pair takes you behind the scenes to unravel the complexities surrounding IPOs, including pricing, allocations, and the elusive "pop." They also discuss OpenTable’s IPO, which occurred immediately following the worst financial crisis since the Great Depression, and weigh in on the question: Can you time an IPO in an unpredictable year?

Transcript

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0:00.0	We think we can perform in the market. We wanted to meet bankers ahead of time.
0:04.5	And how far in advance did you do that?
0:06.0	Hey, why do we need to go see all these investors? Can't we just do a 35 million dollar
0:10.3	IPO to four or five folks? You can't time the market because it's clearly
0:13.8	a long process. Am I the kind of person who over-hipes under to
0:16.7	delivers or do I under-hipe and over-deliver? How big does your IPO need to be?
0:21.0	What is your market cap need to be? How big do the proceeds need to be? What does your market cap need to be?
0:23.0	How big do the proceeds need to be?
0:24.0	Tell me the truth.
0:25.0	Did you guys have like a magic number in your head before you start those pricing
0:27.6	discussions? Now you're just like, it's in every newspaper
0:30.5	of business section in America, We're going public today.
0:32.6	Now we're not going public.
0:33.6	What did you guys do?
0:34.8	Initial public offerings or IPOs
0:37.6	are one of the few ways that startups can experience a liquidity event.
0:41.6	And looking back on 2022 and 2023, the U.S. stock market
0:46.2	IPOs fell to decade flows with 181 and 154 IPOs respectively.
0:54.0	For comparison, the all-time record was established just the year prior in 2021 at 1,035000.0.
1:03.0	So as we head into 2024, with many people speculating
1:06.9	whether the IPO window will reopen,
1:09.3	we actually wanted to revisit an important conversation
	...

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