It's the nature of the VC beast. From the very beginning of a relationship, investors are thinking about how it's going to end.
For the companies, though, an exit is not the end. Very far from it, in fact, as we were reminded this week by major developments at three companies behind some of the biggest VC-backed IPOs in a year that's been chock-full of them.
Uber, Lyft and Beyond Meat are livening up the dog days of summer with a collection of post-IPO problems—and that's one of 12 things you need to know from the past week:
1. Unicorn hangoversUber raised more than $8 billion with its IPO in May. Less than three months later, the ridehailing powerhouse is cutting costs by firing 400 workers from its marketing division, according to reports that emerged on Monday, prompting a week-long decline in the company's stock price—the most significant downward movement since a sharp dip in its second day of trading.
The rank-and-file seem to be doing just fine at Lyft; for Uber's primary rival in the US, this week's big news came from the C-suite. COO Jon McNeill is on his way out the door, about 18 months after joining Lyft from Tesla, and the company doesn't plan to hire a replacement, according to a Bloomberg report from Monday. That began a week in which Lyft's stock price sunk from nearly $66 per share to less than $58, losing major ground in its ongoing fight to get back to its IPO value of $72.
Even more volatile this week was Beyond Meat, the alternative meat company that's been one of the hottest names on Wall Street since going public in May. It experienced two major dips in stock price: The first on Monday, when it announced plans to conduct a secondary offering, the second on Thursday, after it priced that offering at $160 per share. That's more than six times the $25-per-share figure from its IPO, a stunning multiple in such a short time. But it's also well below the $234.90 mark at which Beyond Meat closed the previous Friday. In all, Beyond Meat shares lost more than 20% of their value in the past seven days.
The three companies all represent different angles of this year's VC-backed IPO boom. Lyft, which has long battled to escape Uber's shadow, was the first of the bunch to go public, getting the procession going in late March. Uber was the obvious headliner, a colossus that we always knew would conduct one of the biggest venture-backed offerings of all time. And Beyond Meat emerged from relative obscurity to become a Wall Street darling, turning a $1.35 billion private valuation into a market cap of $13.5 billion in less than a year.
That's a very important decimal point.
But now, all three are confronting the same fickle fates of the public market, where a company's valuation is determined every second of the day by a worldwide network of investors rather than once every year or two by a collection of confidantes. Every move a business makes can have immediate implications for the pocketbooks of its executives, employees and shareholders.
Companies, VCs and people like me can all spend so much time obsessing over IPOs—the who and the when and the how much. But it's important to remember that an exit is just one step in a decades-long process. It's certainly not the end.