This week, the CEO of SecondMarket, the secondary market for illiquid assets, traveled to the World Economic Forum in Davos, where SecondMarket was given a “technology pioneer” award. The distinction didn’t come as a surprise to anyone in Silicon Valley. In the process of fueling the celebrity of companies like Facebook and Zynga, whose secondary [...]
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Yesterday, I caught up with Doug Chu, a former investment banker turned head of the NYSE’s Silicon Valley office. It was a candid discussion that touched on a number of interesting data points, not all of them encouraging for the NYSE.
1.) Unsurprisingly, Chu agreed with Bill Gurley about there being a disconnect between what’s happening in Silicon Valley and elsewhere on the IPO front. In his widely read blog post of earlier this week, Gurley observed that the Valley has come to believe there’s a dearth of IPOs in part because many companies going public are based elsewhere in the country. Chu suggests Gurley should have included China in the conversation. There’ve been 122 IPOs in the U.S. this year, and 25 have been China-based companies listing in the U.S. – a huge percentage.
VC-backed tech companies have a long history of going public on the Nasdaq, but more and more are beginning to choose the once-stodgy NYSE. Examples from the past month include Calix and Max Linear.
“For a long time the NYSE basically ignored Silicon Valley,” says Doug Chu, the fresh-faced head of the NYSE’s Silicon Valley office (and the rest of the Western half of the country). “Most tech companies weren’t even financially able to qualify. Today, that doesn’t fit in the business model.”
That Chu, 42, has the job he does is a telling indicator about how important tech has suddenly become to the NYSE. Before joining the company in 2008, Chu spent 12 years as a tech investment banker, including under Frank Quattrone at both Deutsche Bank and Credit Suisse. Among the companies he helped take public were Amazon, Tumbleweed Communications and Beyond.com. A few years ago, he says, “[the NYSE] had zero tech bankers on its IPO team. They were all capital market folks.”