Direct Listings Are a Thing Now

I’m a big fan of Slack Technologies Inc.’s approach to corporate finance. Near the peak of the unicorn boom, in 2015, Slack Chief Executive Officer Stewart Butterfield correctly noted that “it might be the best time for any kind of business, in any industry, to raise money for all of history, like since the time of the ancient Egyptians.” The relevance of that point to Slack was not obvious, though, because it happened to have all the money it needed. A less financially savvy tech unicorn might have taken that as a reason not to raise more money, but Slack decided that cheap money was cheap money and it was going to get some and worry about the rationale later. Top-ticking the market was its own reward. So Butterfield “said that his start-up had more than enough money in the bank—just before collecting $160 million more” and, when Slack’s bank accounts were totally stuffed, it started making its own venture capital investments: It had an easy time raising money, so why not put the money to work? A “meta-unicorn,” I called it. Also it kept raising money, including from the frankly pharaonic SoftBank Vision Fund.

Is 2019 the best time in history for tech unicorns to raise money from the public markets? Ehh, not particularly. The S&P 500 is down more than 10 percent from its peak last year. Volatility is up. There is an overhang of several very large rumored unicorn initial public offerings, most notably one from Uber Technologies Inc., which might distract investors from other
unicorns. Fortunately for Slack, it still doesn’t seem to need any money, perhaps because it did so very much top-ticking in the private markets. This gives it a certain amount of flexibility with respect to corporate finance. So: