We’re only 2 months into 2021, and it has already been full of IPO buzz. In a pandemic year – with so much economic uncertainty in the air – this is no small feat.Here are 3 key Wall Street trends to look out for, especially if you work for a company that may be going public soon.
Things Are Looking Good
Despite the global COVID pandemic, IPOs had their best year since the dotcom bubble burst, raising $150 billion in 2020. Additionally, 2020 was a stand-out year for billion-dollar deals, with more than 20 companies reaching the enviable sum in profit from 2020 offerings, according to MarketWatch.
Private Unicorns Are On The Way Out
The trend of unicorns staying private is waning, according to TechCrunch. This is good news for employees hoping to make money through stock options, since the unicorn model raises most of the value while the company is still privately owned, giving employees less opportunity to share the wealth when it goes public.
The Next PayPal Mafia?
For employees and ex-employees of newly IPOd companies, reaping the benefits means more available capital. Looking at the bigger picture, those available funds can translate into a new wave of startups, founded by experienced and tech-savvy founders with all the right logos in their bios.
Another possible outcome is that those ex-employees become investors – fueling another wave of well-funded startups, just like we saw with PayPal executives in the early aughts who went on to found huge tech companies like Tesla Inc., LinkedIn, Yelp, and SpaceX and to invest in household names like Facebook, Palantir, and Airbnb. Now’s the time to have an eye out for the new generation of mavericks.
From Insights to Takeaways
If you’re a startup employee in 2021, these insights can be meaningful. Understanding the changing market and the expectation for more liquidity events may help you make decisions which company to join and when. Once you start a new job, looking at your options from a pre-IPO perspective can help you negotiate your contract in a way that can make a difference down the road (read our blog post on that). And of course, if you’re a startup employee leaving a company you helped build or gearing towards its IPO – option funding marketplaces like EquityBee can be a great resource.