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Illustration: Annelise Capossela/Axios

In my early days of covering private markets, there were two pieces of data that were almost impossible to come by: Fund performance and VC-backed valuation. These were "trade secrets" whose disclosure could be catastrophic, all of my sources insisted.

Fast forward: All of my sources were wrong.

Most funds gave up the performance ghost years ago, when several large public pension systems began publishing fund-level returns. There were some legal threats and a few firms stopped taking public pension money, but the upshot was that "disclosed" firms still managed to raise new funds, do deals and generate returns.

The VC-backed valuation piece took longer, but now it's unusual if a large funding round doesn't include some sort of valuation information (including today's two largest deals).

  • This evolution is mostly about marketing, harkening back to Slack's Stewart Butterfield saying in 2015 that raising at a $1 billion valuation was more about the cachet than the cash. Particularly when it comes to hiring and securing enterprise clients, as unicorn status can imply deep-pocketed stability.
  • The most remarkable example came earlier this month, when sources close to Clubhouse were willing to disclose that it had raised at a $4 billion valuation — but not how much money the audio app actually raised, or if it was primary capital. Bizarro trade secret world.

But, but, but... There can be some drawbacks to VC-backed valuation disclosure. Not the disclosure itself, in a "competitive advantage" sense, but the unnatural acts it can lead companies to commit.

  • Doubling a valuation in a few months might feel great, but it also can create unreasonable growth pressures.
  • It also can create some hiring issues, even for startups that have moved from options to RSUs. In short, certain people want to feel there's more runway to valuation blast-off, rather than get aboard once already in orbit.
  • "Unicorn" announcements can spark trickle-down valuation creep, which isn't always matched by commensurate option pool growth.

The bottom line: Private markets still cling to several disclosure taboos, including some information that's kept from a fund's own limited partners. Don't be surprised to see more of them fall by the wayside, without all hell breaking loose.

Go deeper

Robinhood prices IPO at $38

Illustration: Eniola Odetunde/Axios

Robinhood priced its IPO at the bottom of its price range at $38 a share on Wednesday, giving it a valuation of just under $32 billion.

Why it matters: The no-fee trading app maker made an unusually large allocation of its IPO shares available to retail investors, which is expected to make its opening day on the market less predictable.

Bryan Walsh, author of Future
2 hours ago - Politics & Policy

Axios AM Deep Dive: America’s murder surge

Photo illustration: Sarah Grillo/Axios. Photo: Erik McGregor/LightRocket via Getty Images

Homicides rose at the fastest rate in at least six decades last year. This Axios AM Deep Dive, led by Future correspondent Bryan Walsh, looks at the state of gun crime.

6 hours ago - Politics & Policy

Senate Democrats target billionaires

Illustration: Annelise Capossela/Axios

After failing to get a deal on other planned tax increases, key Senate Democrats are pivoting to a billionaires' income tax to pay for President Biden's social spending.

The big picture: No advanced economy has attempted anything similar on such a scale.