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Silicon Valley could have 5,000 new millionaires after this year's tech IPOs

By anonymous following x   2019 Mar 10, 5:39pm 436 views   8 comments   watch   nsfw   quote     share    

At least 5,000 tech workers could become millionaires after their companies go public later this year, according an analysis from a big data realtor in Silicon Valley.

Compass big data realtor Deniz Kahramaner estimates that at least 5,000 employees across eight companies — Airbnb, Instacart, Lyft, Palantir, Pinterest, Postmates, Slack and Uber — could become millionaires after their company goes public in 2019.

“All these IPOs are coming, and $150 billion to $250 billion are going to be unlocked in market capitalization over the next two years,” explains Kahramaner. “All those newly rich tech employees are going to have a significant impact on the real estate market.”

A new record

This year’s 5,000-plus tech IPO millionaires would surpass the estimated 1,000 millionaires who emerged in 2004 from Google’s (GOOG, GOOGL) IPO and the 1,000-plus millionaires in 2012 after Facebook (FB) went public. That this year’s crop will surpass those time periods probably isn’t surprising given the number of companies marching towards an IPO in 2019. But it does speak to sheer amount of wealth that’s about to flood the San Francisco Bay Area.

The markets where all that wealth could be felt most? Real estate and rentals. Kahramaner projects that up to 2,400 of those tech millionaires could potentially purchase properties priced at $1 million or under, while on the very high-end, just over 200 millionaires may purchase properties priced $10 million and over. These purchases will likely drive the local real estate market further. In fact, Kahramaner predicts that no San Francisco property will be priced under $1 million in five years, as a result.

Anthemos Georgiades, CEO of the apartment rental listing site Zumper, which tracks rental pricing trends across the U.S., says that while he foresees a measurable uptick in rental pricing this year in San Francisco of around 10%, these new tech millionaires won’t all jump on real estate once they’re able to sell their shares. (Employees are usually subject to six-month lockups post-IPO that keep them from selling their shares.)

The biggest impact

>b>“The biggest impact from the imminent 2019 IPOs will be felt on the luxury end of the residential rental market, with the most likely zip codes affected being those within a short commute from the new public companies' headquarters, like Uber and Airbnb,” Georgiades explains, pointing to San Francisco neighborhoods such as South of Market.

However, some of these millionaires, many of whom will be millennials, may opt to spend their money on rentals or experiences instead. A Zumper rental survey published last November indicated that 33% of renters now don't believe the American Dream involves home ownership. The company surveyed 5,339 respondents in the U.S. last year across all 50 U.S. states.

“The mainstream argument is that the newly liquid employees will all buy homes overnight, but this is unlikely to be true,” Georgiades contends. “There will very likely be a measurable uptick in home prices this year in SF, but there are also some headwinds that will balance some of this out. … We will see many millennial employees invest their capital in experiences like traveling instead of real estate assets.”

Be that as it may, that won’t stop realtors, vying for some of that IPO money, from trying.


To calculate the number of IPO millionaires, Kahramaner devised a general capitalization table, one which breaks out startup equity distribution among early employees, based upon discussions with members of YCombinator, the 14-year-old startup incubator with alumni such as Airbnb, Dropbox, and Stripe. He assumed the valuation of each IPO company would be equal to the latest venture capital financing round. (Uber’s valuation, for instance, would be $72 billion.)

Kahramaner also assumed two stock dilution factors for each of the eight companies approaching an IPO: that each financing round the startup held diluted the company’s stock a certain percentage (10% for the initial seed round, 22% for Series A) and that executive hires, like Uber hiring CEO Dara Khosrowshahi in 2017, diluted employee stock value further. After the dilution, if a $72 billion company has an employee with 1% stock, for instance, that employee becomes worth $720 million upon IPO — at least on paper. Jake Jolis, a partner at VC firm Matrix Partners, said the methodology was sound, as did Selma Hepp, VP of Business Intelligence at Compass real estate.

NOTE: An earlier version of this article said, “Compass big data realtor Deniz Kahramaner estimates that at least 5,000 employees across eight companies — Airbnb, Instacart, Lyft, Palantir, Pinterest, Postmates, Slack and Uber — could become millionaires after their company goes public in 2018.” That timing has been changed to 2019.


#Millionaires #SanFrancisco #SiliconValley #Housing #RealEstate

1   Rin   ignore (4)   2019 Mar 10, 10:04pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

This is ridiculous, with that kind of bank, move to Ann Arbor Michigan, yes, a college town, 40+ mins away from Detroit. Enjoy the campus based activities during the week and then, see hoes in Windsor Ontario, just across the river, on the weekends. One will never have to work full time for the rest of one's life.

Seriously, this buying a shoebox in a loser city like SF, with its bums, thugs, etc, just to eat at some trendy 'Fusion' sushi place, while making no friends and rooting for Golden State, is just plain lame.

If you're not a native, get out of SF.
2   Rin   ignore (4)   2019 Mar 10, 10:20pm   ↑ like (2)   ↓ dislike (0)   quote   flag        

Tarantula says
Better advice: form another startup and repeat the process.

For many ppl, it's one and out, much like the Chicago White Sox.

Many of those who made it big at places like eBay & Cisco, during the first IT bubble, were at the right company at the right time. So sure, it's possible to hit it again but for the most part, it's time to move on. Only the C-level types hit it several times.
3   TrumpingTits   ignore (1)   2019 Mar 10, 11:05pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

I wonder how many will leave for lower tax pastures after they make it big?
4   Rin   ignore (4)   2019 Mar 10, 11:13pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

TrumpingTits says
I wonder how many will leave for lower tax pastures after they make it big?

I'm only living in Boston, city side, because my firm (& IRS) has allowed me to expense part of my apartment as an office, along with free livery service and hoteling (anywhere in the world). I already own my home in central MA and thus, when this gig finally ends, I'll have a place to settle down in.

Remember, I was born and raised in this area. Living in pseudo-luxury in downtown, is like a childhood fantasy (minus the legal hoeing) come true for a local.

For many SFers, they have zero connection to the region and please, there's no real local sports loyalty in the Bay Area like there is for the Celtics, Bruins, Red Sox, or Patriots in Boston. That's what? ... some 11 championships, just for the 21st century.
5   anonymous   ignore (null)   2019 Mar 11, 2:55am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Rin says
move to Ann Arbor Michigan, yes, a college town, 40+ mins away from Detroit

4 reasons engineers could find the tech job of their dreams in Ann Arbor, Michigan

Innovation, technology, growth and progress: These words are often subconsciously associated with hubs like Silicon Valley and New York City for their vibrant startup scenes. Yet countless brilliant tech companies thrive between the coasts, a trend that is far from new or waning. Take Ann Arbor as a successful example: This Michigan city has fostered innovation for decades thanks to top schools like the University of Michigan. It has more recently been recognized as a flourishing tech hub with significant draws for talented workers.

With the area’s specialties in software and big data, job-hunting engineers will find a plethora of advantages in Ann Arbor. Criteo, a global leader in commerce marketing founded and run by engineers, is one of various local tech businesses that demonstrate this Midwestern city’s ample employment opportunities.

Here are four reasons engineers need look no further than Ann Arbor for a rewarding technology career.

1. Tech talent and opportunity

The earliest roots of the World Wide Web are seeded in Ann Arbor. NSFNET, an advanced research and education networking program, was born out of the University of Michigan and ultimately contributed to the backbone of the Internet we use and enjoy today.

The University of Michigan, which maintains one of the top computer science programs in the country, continues to enrich Ann Arbor’s thriving tech scene with exceptional talent and top-notch research. These factors along with community and capital have contributed to an impressive number of patents, startups and engineering jobs in the region. Companies, in turn, continue to invest in Ann Arbor as a tech-forward startup haven.

2. Job retention and security

Engineers in Ann Arbor find job satisfaction with the level of excellence and their ability to advance in a career that meets their financial needs. Because of the relatively low cost of living (especially in comparison to more “popular” hubs) they can enjoy more carefree lifestyles while saving money, avoiding long commutes and even buying homes. Employers, who appreciate the immense talent pool and loyalty in the area, offer good benefits, lively working environments and job security.

Ann Arbor’s access to world-class talent is matched by a high retention for senior engineers. Criteo’s offer-acceptance and retention rates, for instance, are particularly high in this location. Ann Arbor’s desirability as a workplace relative to other local options is surely one reason, as is the company’s commitment to a dynamic and satisfied workforce.

3. Work-life balance

An innovation hub with Midwestern sensibilities can provide the best of both worlds for engineers and other tech employees. Unlike its more cut-throat costal counterparts, work-life balance in Ann Arbor is more of a rule than an exception, and one prioritized by companies like Criteo.

Work-life balance improves productivity and retention for everyone, among other benefits. Companies that understand this reap the rewards, but location matters too: With its affordable housing, fantastic education and easy commute options, Ann Arbor makes an attractive spot. Toss in a spirited community and a charming downtown with parks, shopping and restaurants and you have all the ingredients for a satisfying, balanced life.

4. Global meets local

Ann Arbor’s time zone is the same as New York City’s, three time zones ahead of the Bay Area. This means there is far more overlap between working hours here and in Europe, a benefit for those who want to make an international impact and collaborate with colleagues overseas. As more and more companies conduct business online, a Manhattan zip code is far from necessary to work at a globally recognized company.

When you are part of a global company, the ability to connect with colleagues across the world is often vital, a position Criteo firmly supports. Incubated in Paris with 2,700 employees worldwide, the Ann Arbor office maintains a small office feel and sense of community with the framework and support of a global corporation. Employees who want to expand their horizons are encouraged to visit and work in offices abroad, but many choose to stay in Ann Arbor for each of these reasons and more.


Ann Arbor Named No. 2 City To Live In America In 2019 - The college town fell from the No 1 spot, but still holds the charts as the second best place to live this year, according to Niche.com.

Ann Arbor is again one of the best places to live in the entire country, according to Niche.com, but this year it claimed the No. 2 spot in the country.

In 2018 and 2017 Ann Arbor was named the top place to live, up from the No. 4 spot in 2016.

Now it falls behind Arlington, Virginia, named the new best place to live in America, according to the website which ranks places, companies, schools and other things.

The rankings are based on cost of living, higher education, housing, public schools, diversity, crime, family-friendly living, health and fitness, jobs, nightlife, outdoor activities, walkability, weather and commute times.

Ann Arbor received an A+ grade for public schools, being good for families, nightlife and commute. The city's lowest grades were a C+ for cost of living and a C for weather. Overall, the city's grade was A+.


It’s clear that Ann Arbor is more than a college town, but a land of opportunity where one need not sacrifice life’s small joys for a larger-than-life career.
6   Rin   ignore (4)   2019 Mar 11, 12:02pm   ↑ like (1)   ↓ dislike (0)   quote   flag        

Kakistocracy says
It’s clear that Ann Arbor is more than a college town, but a land of opportunity where one need not sacrifice life’s small joys for a larger-than-life career.

Ok, that was the media spiel on Ann Arbor.

Here's more of the ground floor report ...

Many ppl in the region have met, through some Univ of Michigan related activity, whether it's scholastic, sporting, or some cultural events. And from what I've seen from UM alumni, they are the most loyal alumni of any school I'd ever known; I've met plenty in the greater Boston to NYC regions and many of them keep in touch, eons after graduation.

I've never seen this from any other school, anywhere else.

If anything, living in Ann Arbor makes those connections into an extended family, possibly lifelong, something which many ppl in the Bay Area don't have. San Francisco & Silicon Valley are the loneliest places in America. Ppl mainly meet at work and for the most part, no one trusts one another. Even ppl who join hiking clubs and sporting outlets, don't really associate outside of those specific activities. This is in stark contrast to Boston where ppl do form bonds and the place appears to be a 'society' and not just a collection of workplaces with nearby shopping centers.

My firm was planning on opening a back office in Ann Arbor, if my friend, who was in graduate student at the time, decided to stay in town instead of looking for work elsewhere. If that were to happen, I would have relocated there and seen hoes in Windsor Ontario, whenever I wanted. In fact, if my retirement plans for Australia don't come to fruition, I might still get a degree at UM and actually settle down there, taking advantage of the Windsor hoeing activities.
7   anonymous   ignore (null)   2019 Mar 11, 12:14pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

If you get tired of the University lifestyle in Ann Arbor, not into hoes in Detroit or across the river in Canada, just a very short drive to the north, northeast or northwest and you can meet up, with and possibly join one of the numerous white nationalist, skinhead, neo-nazi groups etc., the Lower Pennisula is famous for.

Practice "survival" skills, shoot up the countryside and every traffic sign within distance, wear a MAGA hat to go with those new Carharts or flannel shirts and matching puffer vests from JCP while swearing death to anyone not white, GOP, Christian (real belief not required).

Not into any of that ? Go over to Frankenmuth for a Chicken Dinner or take in Greenfield Village in the city of Dearborn.
8   anonymous   ignore (null)   2019 Apr 9, 2:10am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Why the Wave of Mega-IPOs Won’t Bail Out the San Francisco & Silicon Valley Housing Bubbles, Despite All the Hype.

Video embedded in link. 9:12 minutes in length.


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