Month: October 2019

How ordinary investors can grab their slice of the burgeoning shadow market for private tech companies

October 28, 2019

“If you turned back the clock 15 years, and you wanted to invest in a high-growth business, you would go to the Nasdaq,” says Jared Carmel, co-founder of Manhattan Venture Partners, an investment fund that negotiates private stock sales.

“Today, that hyperbolic growth that you would normally see within the first 10  years of the company is behind them [when they go public].

For the traditional public market investor, whether you’re an institution or a retail investor, there has been little opportunity.

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The Big Money in Startups Comes From Investing Before the IPO

October 23, 2019

“The overall level of interest in doing investments ahead of IPOs is insane—it’s through the roof,” says Andrea Walne, a partner at Manhattan Venture Partners LLC, which focuses on this market. “People feel as though they can lock in the same value as the VCs they admire and respect.” Her business card reads “Tomorrow’s IPOs Today,” with a trademark symbol above the phrase.

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Why is Boeing investing in Richard Branson’s rocket plane?

October 10, 2019

Still, some analysts say the market is out there. Santosh Rao, the head of research at Manhattan Venture Partners, says that airline passengers already spend $407 billion on flights lasting more than 10 hours each year. If space companies can win 5% of that business, there’s a $20 billion market. But average fares for those flights are $2,500, so a ticket to ride on a spacecraft will need to fall drastically from current levels.

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SoftBank’s plans for second mega-fund hit by WeWork debacle

October 7, 2019

“I think that it’s incredibly likely that they’ll postpone their plans for … fundraising efforts around Vision Fund 2,” said Andrea Lamari Walne, a Silicon Valley-based partner at Manhattan Venture Partners, which facilitates secondary transactions.

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The IPO market is rebelling against many of 2019’s money-losing unicorns. Here’s what’s scaring investors away — and what it means for the future.

October 3, 2019

Slack and Spotify directly listed on the New York Stock Exchange in recent years, and the home-share company could inspire more unicorns to copy the tactic.

No matter the path to markets, firms are seeing greater public scrutiny toward their financial figures. The “honeymoon phase” of post-IPO pops “is going to go away,” Manhattan Venture Partners head of research Santosh Rao said.

Companies will need “a clear path to profitability” if they want to transition from private funding to public markets, he added, stating that private funding rounds will hinge more on bottom-line performance and projected public performance.

“Toward the later rounds, private investors will have to be more rational in what they’re willing to pay,” Rao said in an interview. “The company has to be able to withstand public market scrutiny, which will only get more intense after this round of IPOs.”

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WeWork IPO Filing Withdrawn as Roadshow Leads to a Dead End

October 1, 2019

And for others like Santosh Rao, head of research at Manhattan Venture Partners, We Co. will likely have to start from scratch with their filing. He suggests the way the prospectus is set up currently is “absolutely a no-go.”

Indeed, for others like Manhattan Venture Partners’ Rao, the major investors in We (like JP Morgan and SoftBank) are somewhat stuck.

“I’m sure [the financing] can be renegotiated,” Rao told Fortune. “At this point, … I think that the bankers have invested a lot already, so they’re not going to abandon ship at this point, they will stay the course. It may be renegotiated, maybe on different terms, and maybe they have to pay a higher rate … but it’ll get done. It’s in the best interest of the banks.”

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