University Of Florida, Manhattan, Santos discussed on Marketplace


In this economy that is venture capital backed not publicly traded company is generally agreed to be the shared workspace company we work something like forty seven billion dollars valuation and that's why report in the Wall Street journal caught our eye the paper says we works co founder Adam Newman has been using his stake in the company to raise cash seven hundred million dollars in cash he's been doing it by taking out loans against his equity in selling some of his own stock which is interesting because we works gearing up to go public this year perhaps and a founder trimming down its stake ahead of an IPO is not necessarily a great look but as market place Justin how reports the economics of going public or change investors in private companies want to see the company founders hold on to their stock ahead of an IPO this is Kathleen Smith at renaissance capital we'd like to see founders have skin in the game space renaissance capital invest in newly public companies and she says of a founder holds on to their stock ahead of an IPO inspires confidence if the founder sales investors might worry about what could happen after the company goes public because they'll see a founder who has very little downside if things go wrong but we work site PO is happening when the economy is strong the stock market's been on the rise too so for we works co founder Adam Newman if he has to take out money I guess this is the right time to do it that's Santos row at Manhattan venture partners he points out that we work leases space to other companies in the real estate market it's been doing very well interest rates are low the vacancy rate so low the practice of selling stock in a private company before it goes public is becoming more common the founders of snap Zynga and Groupon did it ahead of their IPOs companies are waiting longer before going public which makes the incentive for founders to cash out even stronger plus Jay Ritter at the university of Florida says there's a growing interest from investors who want to get in early there's so much money from venture capital funds sovereign wealth funds to invest in these private companies but that private company stock it's only available if someone's willing to sell it in New York and just in hell for marketplace.

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