An IPO guru on slumps, SPACs and what’s next

In 2022, though, the teeter-totter has once again tipped. So far, it’s been the most arid year for IPOs since that previous nadir of 2016, with just 18 listings in the U.S. to date. Now that last year’s stock-market bull run has come to a screeching halt, advisors are suggesting companies delay their listings until friendlier conditions prevail. 

One of those advisors is Byron Lichtenstein, a managing director at Insight Partners and the firm’s guru of going public. He’s a co-author of Insight’s handbook for IPO readiness, and last year he helped oversee the public debuts of 11 Insight portfolio companies. 

This year has been a little different. But when the IPO market does eventually bounce back, he expects it to do so in a very big way. 

“There are more companies today that I think have more potential to be giant than ever before,” he says. “Insight’s been doing software investing, in particular B2B software investing, for more than two decades at this point. And over that whole period, we’ve seen the market just become larger and larger and larger. And what we’ve seen time and again is, these businesses get bigger than we ever thought they would get."

I spoke some more with Lichtenstein about the current state of the market, his role at Insight and how he assesses whether a company is ready to go public. Check out the full story. —K.D.

For founder Adeyemi Ajao, the moment is a bit bittersweet. “It’s crazy that in a world where venture capital raises $150 billion a quarter, we are the first one. There should be multiple by now,” he tells Kenrick.

While they will always be the first, Base10 may not be the only for long. Since its 2018 founding, numerous Black-founded firms have started to gain traction, as Cai points out. Harlem Capital, founded in 2019, has already raised its second fund, which collected significantly more than its first. Last month, SteelSky Ventures raised $72 million for its debut fund.

And Ajao’s LPs have been asking him to introduce them to more Black-led funds, signaling a change in narrative for the industry. “I was not hearing those questions four years ago,” he says. —B.S.

Ownership Works was founded by Pete Stavros, co-head of private equity for the Americas at KKR, where he’s helped pioneer the idea of stock-ownership programs within the industry. Miller cited Harvest Partners, Leonard Green & Partners, Ares Management and Apollo as other firms with existing plans that served as useful models. 

The participating firms have committed to implementing stock-ownership programs at a minimum of three portfolio companies by the end of next year. If and when a company is sold, workers would receive an equity package worth no less than either 20% of the management equity plan or the equivalent of six months’ salary. 

“It’s really about creating access to wealth-building opportunities for lower- and moderate-income families,” Miller says. —K.D.

— Voyager Ventures raised $100 million for its debut fund focused on North America-based climate tech companies. The fund is led by Sierra Peterson, who has backed 25 early-stage climate tech companies since 2015, and Sarah Sclarsic, a former cofounder of car-rental startup Getaround.  

— Miami-based I Squared Capital closed its third global infrastructure fund with $15 billion in commitments, a huge step up from a $7 billion predecessor that closed in 2018. It’s the second largest infrastructure vehicle to close so far this year, trailing a $17 billion effort from KKR last month.

— Ghost Financial raised $2.5 million for its platform that provides payroll, insurance and other financial services to so-called ghost kitchens—a growing trend gobbling up venture capital dollars. The Austin-based startup received funding from Hustle Fund, HOF Capital and 305 Ventures, among others. 

— Carlyle Group closed its second credit-opportunities fund with $4.6 billion in commitments, topping a $3.1 billion predecessor. Another private equity power wrapped up a debt vehicle of its own: Thoma Bravo closed its second credit fund on $3.3 billion.

— NFTs as a service? Novel, which helps companies and brands create and sell NFTs, raised a $6 million seed round that values the startup at $21 million. The round was led by Lerer Hippeau with participation from VaynerFund, Costanoa Ventures and Sugar Capital, among others. 

— Euronav and Frontline, two major owners and operators of crude oil tankers, agreed to merge on Thursday in an all-stock deal that would create a combined company with a current market cap of $4.2 billion. Euronav shareholders will own 59% of the merged business and Frontline backers the remainder. Euronav is based in Belgium and Frontline in Norway.

— Flexia secured a $4 million seed round for its AI-enabled at-home pilates reformer machines, in another sign that Peloton hasn’t fully scared investors off from the home fitness market. The round was led by ADvantage with participation from Phoenix Capital Partners, Techstars Sports Accelerator and Calm Ventures. 

— Berkshire Hathaway has built up a roughly 11% stake in HP worth some $4.2 billion, continuing a busy stretch of dealmaking for Warren Buffett. Last month, Berkshire agreed to buy insurance conglomerate Alleghany for $11.6 billion; it also recently built out its stake in Occidental Petroleum to nearly 15%.

— Blackstone is working with Italy’s Benetton family on a potential joint bid to buy Atlantia, a major operator of toll roads, airports and other infrastructure assets in Europe, per multiple media reports. The Benettons, who already own about a third of Atlantia through their Edizione holding company, rejected a competing bid from Global Infrastructure Partners and Brookfield Asset Management on Thursday. Shares in Atlantia gained some 7%, taking its market cap to €16.6 billion (about $18.1 billion).

An inside look at Elizabeth Warren’s plans to break up not just big tech, but big everything. (Recode)

Things keep getting worse for Better.com. Just a month after the startup laid off 3,000 people, it’s now asking certain employees to accept a severance package and voluntarily resign. Yikes. (TechCrunch) 

A celebrity Botox doctor built a Bel Air mansion unlike any other. The only problem? He “dreamed too big,” and now he can’t afford to live there. (Wall Street Journal)

In humans, common sense is just that—common. But for the experts trying to build the next generation of AI systems, it is still anything but. (New Yorker)