New Metrics for Corporate Governance : Shifting Strategies of 'Activist' Investors in an Aging IPO Market

This paper examines initial public offerings (IPOs) as funding rounds for high-tech companies and exit mechanisms for investors, as well as the stringent corporate governance requirements that apply to newly listed companies in the growth stages of their development. Current investment trends seem to indicate that the IPO market is aging: More and more high-tech companies decide to remain private longer. Moreover, public market investors, such as hedge funds and mutual funds, increasingly invest in non-listed high-tech companies, making “IPO-like” investment rounds at massive valuations a normal phenomenon in the private market. These developments have led to the belief that we are in the next tech bubble. Fortunately, however, a new "establishment" amongst investors is emerging. They realize that in order to prevent the bursting of the bubble, they must collaborate with management and actively contribute to a company's medium-term and long-term performance