Weekly Update #164: WSJ unveils the investment returns of Sequoia, Andreessen, and Others
Sep 7th, 2016
"Marking" your private investments, How wide will the IPO window open, and more
We're in the middle of a short work week here in the U.S., hence this email being delivered on Wednesday. Did you see that we introduced the EquityZen Top Trending Companies list last month? We're working on the results from August, to be released soon. My guess is there will be companies with near-term IPO prospects (more on this below) that make the list.
The Wall Street Journal decided to publish a piece last week on Venture Capital fund performance highlighting a few big names. It's unclear if they thought response would be limited before a holiday weekend, but that was certainly not the case. One of the firms mentioned published a thorough response later the same day, and Fortune's Dan Primack broke down the issue further.
We at EquityZen followed the back and forth with interest, and although we don't want to regurgitate all the points here, we want to focus on the key takeaway that Primack describes as "the broader point that all carrying marks on VC portfolios are subjective until there is a distribution."
To rephrase in terms applicable to investors through EquityZen, valuing direct private investments can be subjective until there is a liquidity event.
In other words, marketplaces that provide for liquidity and resulting distributions play an important role in the investing ecosystem. Though today's private markets are far from perfect, ones guided by Supply and Demand principles like EquityZen do more than play matchmaker.