Inside the end-of-year IPO rush
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Inside the end-of-year IPO rush

Protocol Pipeline

Hello and welcome to Pipeline. This week: The death of the funding story, how expensive YC really is, and the companies (and the people behind them) that you should know as they go public.

Some quick housekeeping: Pipeline will be off the next two weeks while I'm on vacation followed by Thanksgiving. I'm grateful to all of you readers who have been on this journey with me since Pipeline launched six months ago. I'll see you in December.


  • Bessemer's 2007 JV investing team took over Silicon Valley. Kevin Gao pointed out on Twitter that 8 out of 12 junior investors at Bessemer in 2007 went on to become partners at top firms, including folks like Benchmark's Sarah Tavel and GGV's Hans Tung. My question: Have any other investment cohorts come close?
  • "Nobody announces their seed rounds anymore." My inbox would beg to differ, but Better Tomorrow Ventures' Sheel Mohnot told TechCrunch this week that not a single company in its portfolio has announced funding.
  • Biden's LTV:CAC ratio. The president-elect is on track to spend $18 per vote he received in the election. I'm not sure how to calculate the lifetime value, but I'm sure plenty of companies are envious of a CAC cost of $18 for 70 million+ users.
  • The next level in remote work? I'm ready to replace myself with a Lego minifig.

Biz on Biz

Let the IPO rush begin

DoorDash kicked off the race to the markets on Friday, finally flipping its long-awaited S-1 to start its path to go public. And there are a bunch of other companies, from Airbnb to Wish, that are looking to follow it out the door.

  • The window is quickly closing for startups that want to go public this year: Companies have to wait 15 days to launch IPO roadshows (or the virtual version thereof) after they flip their S-1. That means there's a tight window of roughly the end of next week to be able to publicly file and get out before the holidays.

Here are the companies in the IPO waiting room — and the names you should know that will get top billing as they go public.

DoorDash: The food delivery company is first out the gate, and clearly, the coronavirus pandemic has been good to its business: Revenue nearly tripled in the first nine months of 2020, compared to the first nine months of 2019. But it's still another money-losing company, and DoorDash warns that it likely won't be able to sustain these growth rates going forward.

  • The names you should know: Co-founders Tony Xu, Andy Fang and Stanley Tang each have stakes between $750 million and $850 million if DoorDash earns a $16 billion valuation. Compared to a lot of founder-led companies (including rival Postmates), CEO Xu has kept a down-to-earth and quiet profile, but likes to surround himself with talented, name-brand people. DoorDash's CFO, for example, is Prabir Adarkar, a former Goldman Sachs VP and Uber finance chief.
  • Backers who benefit: SoftBank's Vision Fund owns 22%, a position worth $3.5 billion at a $16 billion valuation. Sequoia follows with a stake worth possibly $2.9 billion, and Singapore's GIC holds a stake worth just under $1.5 billion.
  • What to look for: My colleague Shakeel Hashim has what you need to know, but big questions remain on the impact of legislation, like Prop 22, on its business and what happens to sales after the pandemic.

Airbnb: It was supposed to beat DoorDash out the door but ended up pushing its filing to next week to avoid election uncertainty, according to Bloomberg. Still, the company has been laying the groundwork for its IPO already, announcing a new host endowment and releasing details on a new compensation plan for CEO Brain Chesky. And it's also rumored to be eyeing a listing early next year on Silicon Valley-backed Long Term Stock Exchange.

  • The names you should know: Co-founders Chesky, Nathan Blecharczyk and Joe Gebbia are already considered billionaires from their stakes in the company, according to Forbes. Chesky is known for his storytelling and "probably the closest person in Silicon Valley right now to creating Steve Jobs' reality distortion field," according to Eric Newcomer. One question is how much of a role Chris Lehane, its "spin master," will take in the IPO proceedings and crafting that narrative. At the financial helm is Dave Stephenson, an ex-Amazon exec who was injured in a ski accident right around when he took over in 2019.
  • Backers to benefit: Silver Lake's big investment is one to watch. Otherwise, big backers include firms like Founders Fund, Andreessen Horowitz, Google's CapitalG and Sequoia. In fact, longtime Sequoia partner and former Zappos COO/CFO Alfred Lin will end up a big winner from both DoorDash and Airbnb's IPOs. So will Y Combinator.
  • What to look for: The Information has 10 questions IPO investors should be asking, but I think the biggest one is what's going to drive Airbnb's growth in the future. Experiences hasn't panned out to be a runaway hit, and Airbnb has had to pull back from expanding into other areas like flights. I expect to hear a very different business narrative than previous years coming out of the pandemic as it pivots to longer and more local stays.

Wish: The ecommerce startup announced in August that it had confidentially filed its S-1 and is now reported to try to go public by the end of the year.

  • The names you should know: CEO and co-founder Peter Szulczewski is already a billionaire, thanks to owning 18% of the company. (Co-founder Danny Zhangreportedly owns closer to 4%.) Wish CFO Rajat Bahri joined four years ago after stints as CFO of Trimble Navigation and Jasper Wireless.
  • Backers to benefit: GGV's Hans Tung will do well, along with firms like Founders Fund, 8VC and DST Global. Jared Leto will also get a return from his early investment in Wish.
  • What to look for: Ecommerce has done well in the pandemic, but with Wish's sourcing largely from China, it likely faced more of a supply chain disruption. Its reliance on China may have been more of a risk in the Trump administration, but it's still unknown how a Biden presidency may change things. Also, the company is well-known for its ad spending on Facebook, so marketing costs should be eyed closely.

Roblox: The video game platform announced back in October that it had confidentially filed to go public in an IPO that could double its recent $4 billion valuation, and it's reported that Roblox still plans to get out by the end of the year.

  • The names you should know: Another founder-run company, CEO and co-founder David Baszucki officially launched Roblox in 2006 after working on it for a couple years. Sadly, his other co-founder Erik Cassel died of cancer in February 2013. Roblox's CFO, Mike Guthrie, is a later addition, joining Roblox in 2018 after taking TrueCar public.
  • Backers to benefit: Big names like Andreessen Horowitz, Tiger Global, Greylock and Index Ventures all invested. But keep an eye on backers like Anthony Lee at Altos Ventures, too.
  • What to look for: Roblox saw a surge in use during the pandemic as kids were finding ways to play online with their friends. It faces similar questions as DoorDash of whether its momentum can be sustained from here.

Affirm: Bloomberg said a filing from lending company Affirm could be "imminent" after the company announced its confidential filing in October.

  • The names you should know: It's a second act for PayPal co-founder Max Levchin who started Affirm in 2012 and told me in 2014 that he wanted to build a "multi-hundred-year company." Levchin will be front and center of the roadshow, but Affirm's CFO is former HP exec Michael Linford.
  • Backers to benefit: Joshua Kushner's Thrive Capital led its $300 million series F round in 2019. Other firms include Spark Capital, Founders Fund, Khosla Ventures, Lightspeed and Andreessen Horowitz, plus actor Ashton Kutcher.
  • What to look for: How much the coronavirus affected Affirm's business. Levchin had said that the lack of cash purchases means more shopping would move to online, but whether people will take out more debt is unclear. Already credit card debt has declined during the pandemic.

That's the shortlist of likely contenders for the end of the year, but there are startups like Poshmark that have also been waiting and could go public this year. Other companies are reported to be eyeing 2021, including Instacart, Bumble, ThredUp, Flywire and Databricks. Plus don't forget the startups like Opendoor and Hims & Hers going public through SPACs soon.

It's a good time to remind investors that @VCBrags is back and ready to promote the best self-congratulatory tweets. And if you need help translating just how excited a VC is over a company's exit, Homebrew's Hunter Walk has the best breakdown of how to interpret a VC's enthusiasm over an acquisition (although this may also apply to an IPO, too).



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Inside Track

  • How expensive is Y Combinator? Mat Shermanbreaks down how the 7% of a company Y Combinator takes plays out — and the unavoidable truth that it sets up every company to be a venture-scale company as a result.
  • Udemy co-founder Gagan Biyani and altMBA co-founder Wes Kao have a new company working on online education. It's still a stealth startup, but I found their Notion landing page that lays out the company's beginnings (including a breakdown of investors by category from knowledge influencer to tech operators) and is a level of transparency into a company's beginning that you normally don't see.
  • In more Notion docs (is it the new Medium?), startup Air published its "Documentation for Dummies," a portfolio of documents for early-stage startups to copy. The templates include everything from basic job descriptions to fundraising plans to project management and operating guidelines.

Need to Know

  • Trump supporters pushed Parler to the top of the App Store. After claiming to be censored by Facebook and Twitter, many conservatives flocked to alternative sites like Parler, which nearly doubled its users to 8 million in the last week, according to The New York Times.
  • Remember the TikTok merger drama? Apparently the Trump administration forgot about it, too. It was supposed to be shut down on Thursday, but then the Commerce Department said it won't bother enforcing its own order. CFIUS, though, extended its deadline to Nov. 27 as the new date that the divestiture deal needs to be completed.
  • Biden stacked his transition team with tech people. Names from the startup world include Divya Kumaraiah, Airbnb's strategy and program lead for cities; Nairi Tashjian Hourdajian, VP of comms at Figma; Will Fields, Sidewalk Labs' senior development associate; and Natalie Kates and Raphael Majma from Reid Hoffman-backed Alloy.
  • The DOJ cleared the Uber-Postmates deal. Plaid and Visa are probably jealous at how the Justice Department signed off on the merger of the two food delivery units.
  • From Protocol: Is Hopin this year's breakout tech startup? Investors seem to think so.
  • This week in VC history: Y Combinator kicked out's founder from the accelerator, saying he had violated its harassment policy.
  • And your weekend reading: "Quibi took everything that is Hollywood and nothing of what was truly a startup." If you were wondering where Quibi went wrong, Bloomberg published a post mortem on how Jeffrey Katzenberg and Meg Whitman couldn't pull it off. Don't worry about Whitmna's future, though. She's reportedly a contender for a cabinet position in the Biden administration.

Five Questions With ...

IVP's Ajay Vashee

The former CFO of Dropbox, Ajay Vashee announced this week that he is joining IVP (a Dropbox series B investor) as its newest general partner in January and will focus on investing in high-growth tech companies.

What products or services are you totally, even irrationally, loyal to?

Personally: TikTok and Impossible burgers. Oh, and I can't live without my Bose QC20 noise-canceling headphones, especially while working from home with two toddlers in the house. As a former operator at Dropbox, it was incredible to see how usage of Figma spread through the company. We even used it in the finance organization!

What's a secret obsession of yours that most people don't know about?

Early Christian and Byzantine art — most people don't know that I was an art history minor in college! I had an incredible, inspiring professor who was an expert in the field. Former CFOs can be cultured, too, haha.

SPAC: Overrated or underrated?

To be determined. I think the IPO process is something that should evolve and has room for improvement. When we took Dropbox public in 2018, direct listings and SPACs weren't yet part of the toolkit. If I was taking Dropbox public today, I'd want to evaluate all options thoroughly. But I'd note that the traditional IPO path, direct listing and SPAC are all a means to the same end: to transition to the public markets. So what's most important is that you're building an enduring business and that you're prepared to operate as a public company.

What problem do you want to see a startup solve?

There's a tremendous amount of potential for innovation across the CFO tech stack today, and it's a space where I actively angel invest. I'd love to see a startup disintermediate Excel as the unifying substrate of finance organizations around the world. You'd be surprised how much we relied on Excel — as a private and a public company — and how inefficient that could be. And I'd love to see more low-code and collaborative workflow tools designed with the finance end-user in mind.

What's a pitching pet-peeve?

As someone who managed multiple rounds of fundraising at Dropbox — as well as our IPO — investors who weren't prepared or mentally present in meetings, or who tried to multitask, were always a pet peeve! I'm committed to being a focused partner to the companies I work with, whether it's a first pitch or a longer-term relationship.



Welcome to the age of synthetic media

Content generated or manipulated by AI through machine or deep learning is changing how we create, distribute, consume, and democratize media. What does synthetic media have the power to change next?

Learn more

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