Bloomberg Businessweek

Spring Is Coming For IPOs

Some of the most valuable new companies are still private, but more may cash in soon

Don’t be so afraid of a down round.

That may be the message Silicon Valley takes from the initial public offering of Dropbox Inc. on March 22. In the weeks before the cloud-storage company’s stock market debut, it first targeted a price of $18 a share on the high end, giving the company a market valuation of $7.1 billion. That would have been about a third lower than the $10 billion it was valued at in its previous round of private fundraising—earning the IPO the “down round” stigma.

Things worked out better. Dropbox ultimately sold the stock for $21 a share, pulling its valuation past $8 billion. And by the end of its first trading day, it rose an additional 36 percent, to a total value of $11.1 billion. On the one hand, there’s a chance Dropbox could have raised

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