The investor behind companies like eBay and Allbirds says IPOs give startups the freedom to escape domineering VCs

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Dan Levitan, cofounder of Maveron, thinks even companies with dual class structures are governed better when they're public.

, said he sees the tide changing from five years ago when entrepreneurs were fully committed to staying private.as a way to escape domineering investors or conflicts on the board level, he said Monday at the Milken Institute Global Conference during a panel looking at the current wave of tech IPOs. A public governance model is the best way to do that, in his view.

"We're five years into this experiment of large firms like SoftBank and others taking outsized platforms and putting in hundreds of millions if not billions of dollars," Levitan said."What I've talked to some founders about is, do you want to be captive to one investor?"as a classic example of a"highly dysfunctional" private governance structure.

"The IPO, bizarrely, is an attractive thing to the management team because they're being pulled in different ways," Levitan said.Harvard researchers say that Lyft investors will likely come to regret giving the cofounders so much control with so little stock Axios editor Dan Primack, who moderated the panel, then asked whether Levitan thinks IPOs improve governance in the case of dual class public listings, which give founders and early board members high-vote stock and disproportionate decision-making powers compared to public investors.Kara Nortman, partner at UpFront Ventures, had her own take on mega late-stage investors to share during the panel:"I think that is the value of a longterm early stage investor.

 

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