The New Rules of the IPO
Silicon Valley Is Quietly Building Its Own Wall Street
Can a new stock exchange backed by the Bay Area’s most powerful players take on the NYSE and Nasdaq?
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This story is part of The New Rules of the IPO, a multi-part special report.
Illustrations: James Clapham
On a drizzly San Francisco day in December, Eric Ries is stationed inside the Succession-worthy offices of Orrick, Herrington & Sutcliffe. Here, at the billion-dollar law firm — whose clients include Oracle, Microsoft, Intel, Cisco, Pinterest, and Stripe — guys dressed VC chic in V-neck cashmere sweaters and soft loafers shush across carpeted floors. It’s a frictionless world, all potential irritants engineered away. If you want to be where it happens in Bay Area tech, this is a good place to start.
Ries, in black glasses and a chinstrap beard, looks like a poli sci professor who’s wandered in from Berkeley. The 41-year-old’s 2011 bestseller, The Lean Startup, introduced the masses to product/market fit, minimum viable product, and the pivot. It also vaulted Ries into nerd celebrity status, a coach and mentor to Silicon Valley’s elite. Between his speaking gigs — which now earn him upwards of $40,000 a pop — book royalties, and consulting work for companies like Procter & Gamble and GE, “Lean Startup Inc.” could have allowed Ries to carry on in low-key rich mode indefinitely. Instead, Ries is now focused on his most ambitious — and risky — venture yet: a new stock exchange called the LTSE, or Long-term Stock Exchange.
Ries’s words and time are now tightly guarded by a personal assistant and the LTSE’s head of communications, Steve Goldstein, whose last job, as Rex Tillerson’s Under Secretary of State for Public Diplomacy and Public Affairs, ended in dismissal via presidential tweet. (Ries, for the record, was a prominent supporter of “Nerdz 4 Hillary,” a 2016 tech-world fundraiser for Hillary Clinton.) Today, Ries is at Orrick — his LTSE cofounder, John Bautista, is a partner at the firm — for a full day of closed-door meetings with CEOs and institutional investors, talking up the LTSE.
The LTSE is a controversial new exchange that, Ries argues, will create a fundamental…
