Post-2012 IPOs are a scam. There is nothing enjoyable about being a public company. Between audited SEC filings, exchange regulations, and analysts in the peanut gallery, public offerings are all downside.
Emerging growth companies are dragged kicking and screaming into the public markets when their early investors finally want to cash out. And an institutional investor only wants to cash out if the emerging company isn’t showing much growth anymore.
Uber’s still growing, which means it’s cool to stay private. But it needs more investor classes to draw from, so it went straight to the retail investors. Okay, the retail investors are Goldman Sachs clients, which makes them the top 0.1% of retail investors, but still: this is the same investor class that would be subscribing to an Uber IPO.
Uber has made a general solicitation, it’s acquired retail investors — Uber has done everything but list on NASDAQ. According to JOBS Act requirements, Uber can have up to 2000 accredited shareholders of record. It could even have up to 500 non-accredited shareholders. But why would Uber want your pocket change when it can have the pocket change of Goldman Sachs clients?
I won’t speculate on when and whether Uber will file for IPO. Maybe someday growth will have steadied and better investment opportunities will have emerged for its existing shareholders. Maybe it will have been so many years that Benchmark and First Round step in and say, Listen, our LPs are long dead and their heirs really need to cash out to pay their estate tax.
And then there will be a road show where institutional clients get first dibs on the Uber IPO. And there will be much fanfare, and a huge pop, and all the investors to date will walk away with fistfuls of money.
And after that, after everyone else has cashed out, that’s when Uber sells its shares to you.