Sydney, New South Wales Sep 10, 2021 (Issuewire.com) - The continued growth and power of private financing alternatives have changed the dynamic of initial public offerings over time. Historically, an IPO was the ultimate goal for a company and its founders after raising initial venture capital and developing a story to sell to the public markets, and investors eagerly sought allocations in highly anticipated offerings. In recent years, however, the focus has shifted to late-stage private capital-raising, sometimes referred to as the "private IPO round" or the "final private offering," through which companies can attract significant funding from a broader group of investors in advance of or in conjunction with a traditional IPO. These private financings can have a significant influence on a company's subsequent IPO, and, if properly structured and planned, can provide a strategic benefit for both issuers and investors.
In a speech at the Economic Club of New York in September 2019, Securities and Exchange Commission Chairman Jay Clayton said, "Twenty-five years ago, the public markets dominated the private markets in virtually every measure. Today, in many measures, the private markets outpace the public markets, including in aggregate size." In its most recent analysis, the SEC's Division of Economic and Risk Analysis reported that in 2017 registered offerings accounted for $1.5 trillion of new capital, compared to more than $3 trillion reported raised through all private channels.
A number of dramatic IPOs in 2019, including the highly anticipated offerings of Beyond Meat, Fiverr, Lyft, Pinterest, SmileDirect, Uber and XP, reflect the range of potential outcomes when pursuing financing in the public markets: Some of these offerings were great successes, while others experienced significant post-IPO stock price declines. Against this backdrop, a number of companies chose to delay or withdraw potential transactions.
The volatility in the 2019 IPO market highlighted the perceived misalignment between what may be valued by investors in private, pre-IPO rounds of financing and what public investors want to see post-IPO. Historically, many pre-IPO companies have successfully attracted private capital based on innovative or disruptive ideas, powerful mission statements, brand recognition and rapid growth, and the vision and reputation of charismatic leaders, even without profitability. On the other hand, public market investors increasingly are demanding a clearer path to profitability, fundamentals of long-term value and growth at a reasonable price.
Berenson Capital has gained early access to private equity shares of Rivian and is distributing them to qualified investors in Australia.
Rivian is an electric vehicle manufacturer focused on up-heaving the market for consumer pickup trucks, SUVs, and delivery vans.
The company rivals Tesla, Lucid Motors, and Nikola in the expanding electric vehicle market, which is set for explosive growth in the next decade.
It was founded by R.J. Scaringe, who earned a PhD from MIT in mechanical engineering and was a member of the automotive laboratory.
The company is based in Plymouth, MI., and has a manufacturing plant in Normal, Il., which it acquired from Mitsubishi Motors in January 2017.
In December, Rivian closed an investment round of $1.3 billion. The financing was led by funds and accounts advised by T. Rowe Price Associates, Inc. with additional participation from Amazon, Ford Motor Company and funds managed by BlackRock.
Rivian has raised $10.5 billion since 2019.
Berenson Capital is able to distribute the pre-IPO equity on the Australian market in co-operation with BlackRock.
Shares are available to professional clients only.
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