Illustration: Aida Amer/Axios

A huge shift in American business was overshadowed amid impeachment last week: Investors are rethinking hot startups with frothy valuations and putting discipline (and reality) above the myth of the almighty and all-knowing founder.

The big picture: The market is now bringing private valuations around to reality, as skittish Wall Street investors have been punishing billion-dollar-plus initial public offerings with questionable balance sheets or paths to profitability.

  • Suddenly, balance sheets and profits seem to matter to investors again, Axios Markets editor Dion Rabouin writes.
  • Peloton is down 13% from its IPO price in just two days of trading, and teeth-straightener SmileDirectClub is 44% below its offer price in two weeks.

Takeaways from Dan Primack, host of the Axios Pro Rata podcast and newsletter:

  • Venture capital went overboard on "founder friendly," but expect structures like dual-class shares to persist.
  • And the real test comes when there’s a hot deal with a hot founder. VCs will do anything to get in. Even if it’s against their professed conservatism.
  • And be cautious about extrapolation: WeWork had big problems. Peloton and SmileDirectClub are still worth lots more than in private markets. Datadog, a monitoring and analytics platform for developers, went public two weeks ago at huge price.

The bottom line from Felix Salmon, author of the weekly Axios Edge:

  • Unicorns (and minotaurs!) are mythical beasts. When exposed to the harsh light of reality, they often look less impressive.
  • Uber, Lyft, and Slack have all traded miserably as public companies, while WeWork has canceled its IPO altogether. Others like Airbnb, Palantir, and Stripe are likely to want to avoid the public markets for as long as possible.
  • The IPO market is now readjusting those frothy private valuations.

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Democrats sound alarm on mail-in votes

Photo: Mark Makela/Getty Images

Democrats are calling a last-minute audible on mail-in voting after last night's Supreme Court ruling on Wisconsin.

Driving the news: Wisconsin Democrats and the Democratic secretary of state of Michigan are urging voters to return absentee ballots to election clerks’ offices or drop boxes. They are warning that the USPS may not be able to deliver ballots by the Election Day deadline.

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Carts full of court documents related to the U.S. v. Keith Raniere case arrive at the U.S. District Court for the Eastern District of New York in May 2019. Photo: Drew Angerer/Getty Images

Nxivm cult leader Keith Raniere, 60, was sentenced to 120 years in prison on Tuesday in federal court for sex trafficking among other crimes, the New York Times reports.

Catch up quick: Raniere was convicted last summer with sex trafficking, conspiracy, sexual exploitation of a child, racketeering, forced labor and possession of child pornography. His so-called self-improvement workshops, which disguised rampant sexual abuse, were popular among Hollywood and business circles.

Erica Pandey, author of @Work
1 hour ago - Economy & Business

Americans are moving again

Illustration: Aïda Amer/Axios

For decades, the share of Americans moving to new cities has been falling. The pandemic-induced rise of telework is turning that trend around.

Why it matters: This dispersion of people from big metros to smaller ones and from the coasts to the middle of the country could be a boon for dozens of left-behind cities across the U.S.