Weekly Update #121: Importance of Square's IPO

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Hello Investors,
 
EquityZen In the News!
EquityZen was quoted in a few articles the past few days:

Why the Square IPO is So Important

Square gave an initial indication for its IPO at $11-13 per share, below its last round of financing at $15.46 per share back in September 2014. Other companies may have reluctant to IPO if the public markets aren't willing to pay a premium to the last private round of financing, whether because of company fundamentals or macro factors. But there's no explicit guarantee of fundamentals or market conditions improving.

So why does it matter?

It matters because, if successful, the IPO could ease concerns of the 140+ unicorns out there that might be sweating it out right now as their latest term sheet was for (gasp!) an $800 million valuation. It will free up other $1 billion+ valued private companies to consider making business decisions that are not solely about growing top-line revenues. It may come at the cost of a slight dip in market cap, but, as they say, cash is king. And raising a few hundred million dollars in the public markets at a slightly suppressed valuation may make the most sense for a unicorn in the long run.

CEO Jack Dorsey is a well-respected entrepreneur, and with good reason: this will be his second IPO of a multi-billion dollar company in less than three years. Hopefully his focus on long-term business building will motivate other founders to do the same. 

 
In Other News... 
In the last 22 months, there have been 4 $1B+ software IPOs and 3 $1B+ software acquisitions. But compared to 2014, 2015 was a meager year for startups looking to go public or be acquired.
 
The Uberization of Money (WSJ)
The familiar middlemen of 20th-century banking and investing are giving way to something very different. Are we ready for the opportunities—and the risks?
 
When Square starts selling shares in its initial public offering (IPO), Silicon Valley powerhouse Khosla Ventures may see a huge windfall of $657 million — at least on paper.
 
Thanks,
Phil Haslett | Founder & Head of Investor Relations | EquityZen 
 
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