Who Wins the 2020 Unicorn Race?
In 2020, the IPO market will depend less on the overall Wall Street trends judging by the fact that some unicorns struggled even when S&P 500, Dow, and Nasdaq were climbing to record heights. Also, finding liquidity for unicorns in the next business cycle is going to be as tough as it is today as Stripe and Postmates choose to remain private for now, the WeWork debacle is still extremely vivid, and Airbnb moving its public debut to 2020. The trend, however, is not new given the congenital eagerness on the part of private companies to build illiquid equities.
What remains a billion-dollar question for 2020 is how we used to look at the unicorn era of the 2010s compared to how we are going to look at it in the near future considering the amount of unvetted paper wealth generated in the past ten years, during which few unicorns have been exit-tested by quality public offerings, lucrative acquisitions, or shuttering. It’s all about post-exit liquidity: if unicorns are able to maintain their worth we are going to look passed Uber, Lyft, Peloton, and other unfortunates and give our undivided to DoorDash, Palantir, Didi and whoever else offers what investors are firmly after – strong corporate governance. No more pushing the envelope with dual-class stock listings or a sole individual control. In the 2020 unicorn race, the one that shows (and exercises) the most integrity while providing a clear path to liquidity wins.
