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Benchmark's Bill Gurley. Photo: Michael Kovac/Getty Images

Venture capital's call for more direct listings is growing louder with a group of big-name investors and tech company executives expected to attend a private, invite-only "symposium" on the matter next month at a hotel in San Francisco.

Why it matters: There's a growing investor consensus that the traditional VC-backed IPO process is antiquated and broken — too often benefiting a high-net-worth bank clients and a small pool of mutual and hedge funds, at the expense of issuers.

Details: Among those expected to speak are Benchmark's Bill Gurley, who's been banging this drum for a while, Sequoia Capital's Mike Moritz, who just wrote about direct listings in the FT, and Spotify CFO Barry McCarthy, whose company went public via a direct listing last year.

  • Jay Ritter, a University of Florida professor who's also slated to speak at the private event, released data in April showing that the "under-pricing" phenomena is accelerating for VC-backed IPOs.
  • He reported at least $6 billion in net under-priced dollars at the time, versus $16.1 billion for 2017-2018 combined.
  • He's also found that average first day returns for offerings led by Goldman Sachs and Morgan Stanley are 33.5% and 29.2%, respectively, higher than for other underwriters.

Our thought bubble: We last discussed this situation in June, around the Slack direct listing, and argued that investors should work with the SEC to create a hybrid structure whereby companies could both list directly and raise new capital.

  • That still hasn't happened.
  • On the other hand, we've heard that law firm Latham & Watkins, which worked on both Slack and Spotify, has drafted a pre-IPO conversion term sheet that could help issuers raise simultaneous capital at a slight discount to the direct listing price.

The bottom line: Venture capitalists regularly congregate at industry conferences in resort towns, but rarely self-organize for the sake of knowledge-sharing and next-step action. Next month's event will be an exception, suggesting that the startup IPO scene could soon undergo a sea change.

Go deeper

Dan Primack, author of Pro Rata
31 mins ago - Economy & Business

SoftBank and StubHub vets form new SPAC

Illustration: Sarah Grillo/Axios

Jeffrey Housenbold, who recently stepped down as a managing partner of SoftBank Vision Fund, has formed a new SPAC with Sukhinder Singh Cassidy, who was president of ticket resale firm StubHub until it was acquired last year by Viagogo.

Why it matters: The death of SPACs has been greatly exaggerated.

48 mins ago - World

U.K. government sets out agenda in first COVID-era Queen's Speech

Queen Elizabeth II walks behind the Imperial State Crown in the Royal Gallery of Parliament. Photo: Richard Pohle/POOL/AFP via Getty Images

Queen Elizabeth II laid out the U.K. government's agenda at the State Opening of Parliament on Tuesday, marking the first Queen's Speech since the pandemic began and her first major public appearance since the death of her husband, Prince Philip.

Why it matters: In a pared-back ceremony, the queen set out Prime Minister Boris Johnson's vision for recovering from a pandemic that inflicted the worst death toll in Europe and worst recession in 300 years.

The ransomware pandemic

Illustration: Aïda Amer/Axios

"We are on the cusp of a global pandemic," said Christopher Krebs, the first director of the Cybersecurity and Infrastructure Security Agency, told Congress last week. The virus causing the pandemic isn't biological, however. It's software.

Why it matters: Crippling a major U.S. oil pipeline this weekend initially looked like an act of war — but it's now looking like an increasingly normal crime, bought off-the-shelf from a "ransomware as a service" provider known as DarkSide.