As some of you may have seen, WeWork is about to close a $4B deal with Softbank. The deal is basically structured with an investment of $2B and an additional $1B in secondary that could go up to $2B. You can read about it here.
The secondary sale means that stock holders holding common will be selling to Softbank. This is where the real shift could come to the market.
This type of structure was more for Private Equity in the past as a way to structure mature businesses or Leverage Buyouts (LBOs).
This is in essence a pseudo IPO with the intention to provide liquidity to early shareholders. This is mainly founders, management, and VCs. Definitely an interesting way to move beyond Series C rounds of financing.
We can call it a fundamental shift if this becomes consistent with other hyper growth companies and a good way to benefit early investors.
What do you all think about this deal and the impact it can have in the market?