Cooper: Discontinuous private markets force investors to price multi-year execution risk
Scott Kupor · a16z Podcast | The Rise of the Quasi-IPO · Jan 2, 2019 · at 22:55
Scott Cooper, managing partner at Andreessen Horowitz, discusses how discontinuous private market trading changes how investors price risk compared to public equity markets.
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“Private markets are discontinuous, right, which is there are, you know, unlike a trade, a public trading market where there is a price, obviously, that's published on a, you know, entirely throughout the day and overnight, part of what people are doing when they invest in these private companies is they're saying, okay, I'm forecasting what I believe the value of this company is going to be over a three to five year period, but I'm also trying to understand when is the next opportunity To invest in this company? And what do I think is the progress that they may accomplish in that time period relative to the risk I'm taking by coming in today versus 18 months or two years from now?”
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