We Don’t Need More Unicorns, We Need More Unicorn IPOs
Investors are far from getting their expected return of double their money.
Among U.S. technology companies, particularly unicorns—those valued at $1 billion or more—2019 is shaping up to be the biggest year since the dot-com bubble in terms of the total value of stock sold in initial public offerings. Lyft had its IPO at the end of March; Pinterest is next, and Uber Technologies is coming within weeks.
Silicon Valley’s dirty secret is that these IPOs are just a sprinkling of rain in a desert for thirsty investors. So far in this decade, $644 billion has been put into young U.S. technology companies—by maverick venture capitalists, stodgy mutual funds, and just about anyone else with money to spare, according to financial data provider PitchBook and the National Venture Capital Association. The global figure is approaching $1 trillion. Those investors eventually must be paid back and generally want at the very least twice what they put into a fledgling company.