VC type returns in the public markets and Q3 IPO watch

A couple days ago, I wrote about the rebirth of hedge funds due to the rise of young “Robinhood traders”. Will the next generation look to turn away jobs in venture capital in favor of hedge fund gigs? I think we’ll see a leveling out of micro-VC funds and a rise in micro-hedge funds in the next few years. And why not?

Investors can earn VC type returns on their investment in current public market in the span of months, not the 10 year horizon of VC investments. By no means am I saying VC funds are going away, but it’s unreasonable to think that the exponential increase we’ve seen in the last few years in micro-VC funds will continue. It will be interesting to watch.

On the topic of public markets, a friend asked me today if there are any IPO stocks that I am watching. IPO szn has seemed to finally hit in 2020 after a 4 month hiatus due to COVID-19. There haven’t been too many big names to hit, but so far so good.

Biotech has been crushing it. Vroom, an online car marketplace, is up almost 100% on it’s IPO a couple weeks ago. I am now a customer of OneMedical which IPO’d in January and is currently up almost 120% since then.

Two companies I am watching for in Q3? Snowflake and AmericanWell. Sorry if you are a follower of the private markets and was expecting a secret name that no one knows about.

Snowflake is a cloud-based data warehouse that is currently valued at over $12b in the private markets. The world’s data continues to grow exponentially and COVID-19 has only accelerated that growth as companies search for solutions to store their data due to increased online usage.

AmericanWell is a telehealth competitor of the already public teledoc. I love the telehealth trend right now. For the majority of cases, there’s just no reason to go in to see a doctor anymore when it can be done online. Diagnoses, prescriptions, and more can be done within 20 minutes virtually. In addition, you can decide to choose your doctor anywhere in the country.

Like most IPO stock, there’s likely going to be good volatility in the short-term, but these are two long term plays that I will be looking for.