AWM Insights #26: Finding the Next IPO Unicorn?

With an estimated $44 billion worth of startups like Snowflake, Unity Software, JFrog, Sumo Logic and Amwell going from private to public right now, is it time to try and strike it rich by investing in the next unicorn company during its initial public investment (IPO) phase? If you only got your investment advice from the mainstream media, you might assume that this is the best way to create massive wealth, but  as you might have guessed, it’s not quite that simple.

The private to public or - IPO - step in the lifecycle of a business is incredibly important. And when companies go public, they often garner massive media coverage. However, is this the best time to invest in a company across the board? The data might surprise you.

In this week’s episode of AWM Insights, Brandon Averill, Managing Partner at AWM Capital, is joined by Justin Dyer, our Chief Investment Officer, to discuss how and when companies typically create the most value. Topics and questions covered include:

Do IPOs favor the investor? Are they a good investment on their own?Why do companies decide to go public?What exactly is a unicorn company, and what stage in a company’s lifecycle is generally considered to be the ideal time to invest?When does most of the value creation for a company occur?What is a direct listing and how is it different from a traditional IPO?Are direct listings similar to SPACs? (For more on SPACs see our previous episode HERE)

Resources

Brandon mentioned a Bill Gurley article on going public in 2020, which you can find HERE