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$UBER went public on Friday. Notwithstanding the initial stumble, Uber will go down in history as one of the most lucrative venture capital investments of all time.
The stock is down from its IPO price of $45 per share, but at that price, the initial seed investment of $510,000 that First Round Capital made back in 2010 was worth about $2.5 billion on Friday.
Here is a list of some of the other notable investors from Uber's seed round and what their initial investments grew to over the course of 9 years (chart from the WSJ):
Of course, for every Uber, there are many more failed companies. And for every investor who turns $5,000 into nearly $25 million, there are many more who decided to pass on the opportunity.
In the case of Uber, many early investors couldn't see how the product could go mainstream. It initially started upmarket with limousines, which was actually a clever way to hack the chicken-and-egg problem that plagues marketplaces.
Many also wondered how many metro areas outside of San Francisco had the kind of urban density and supply and demand drivers to support this kind of a service.
Today, some nine years later and many billionaires later, lots of people -- including myself -- are still wondering: Will Uber turn out to be a great (i.e. profitable) business? Hindsight is always 20/20.
The Tax Cuts and Jobs Act of 2017 (US) created something known as Opportunity Zones. These are low-income and high-poverty census tracts that are designed to attract investment by offering a number of different tax benefits. I first wrote about it on the blog, here.
Now that some time has passed since the final Opportunity Zones were announced, Zillow Economic Research decided to look at the possible impact of this designation on real estate values. In other words: To what extent, if at all, are the tax benefits getting capitalized into the value of the properties?
Below is a chart showing the year-over-year change in the 12-month moving average sale price for low-income census tracts that were (1) eligible and selected as an Opportunity Zone; (2) eligible and not selected; and (3) not eligible.
CBRE recently published this report looking at the impact of the “high-tech software/services industry” on the North American office market.
Here are a few highlights:
- Since 2010, tech has created ~1.1 million jobs in the US at an annual growth rate that is 3x the national average.
- Seattle currently has the fastest tech job growth in North America. This is the first time in 7 years that San Francisco hasn’t been at the top of their list.
$UBER went public on Friday. Notwithstanding the initial stumble, Uber will go down in history as one of the most lucrative venture capital investments of all time.
The stock is down from its IPO price of $45 per share, but at that price, the initial seed investment of $510,000 that First Round Capital made back in 2010 was worth about $2.5 billion on Friday.
Here is a list of some of the other notable investors from Uber's seed round and what their initial investments grew to over the course of 9 years (chart from the WSJ):
Of course, for every Uber, there are many more failed companies. And for every investor who turns $5,000 into nearly $25 million, there are many more who decided to pass on the opportunity.
In the case of Uber, many early investors couldn't see how the product could go mainstream. It initially started upmarket with limousines, which was actually a clever way to hack the chicken-and-egg problem that plagues marketplaces.
Many also wondered how many metro areas outside of San Francisco had the kind of urban density and supply and demand drivers to support this kind of a service.
Today, some nine years later and many billionaires later, lots of people -- including myself -- are still wondering: Will Uber turn out to be a great (i.e. profitable) business? Hindsight is always 20/20.
The Tax Cuts and Jobs Act of 2017 (US) created something known as Opportunity Zones. These are low-income and high-poverty census tracts that are designed to attract investment by offering a number of different tax benefits. I first wrote about it on the blog, here.
Now that some time has passed since the final Opportunity Zones were announced, Zillow Economic Research decided to look at the possible impact of this designation on real estate values. In other words: To what extent, if at all, are the tax benefits getting capitalized into the value of the properties?
Below is a chart showing the year-over-year change in the 12-month moving average sale price for low-income census tracts that were (1) eligible and selected as an Opportunity Zone; (2) eligible and not selected; and (3) not eligible.
CBRE recently published this report looking at the impact of the “high-tech software/services industry” on the North American office market.
Here are a few highlights:
- Since 2010, tech has created ~1.1 million jobs in the US at an annual growth rate that is 3x the national average.
- Seattle currently has the fastest tech job growth in North America. This is the first time in 7 years that San Francisco hasn’t been at the top of their list.
My understanding is that the "not eligible" category represents census tracts with similar characteristics to the other two categories but, for whatever reason, were not eligible to become an Opportunity Zone. There are criteria.
The program is still quite new, but what Zillow found was that the eligible census tracts (green and yellow lines) seemed to exhibit similar sale price increases after the Act was signed, but before the final Opportunity Zones were announced. Once the final Zones were announced, sale prices in the selected category (green line) began to surge and move away from the pack.
This may be evidence that the tax benefits are starting to get capitalized, or it may not be. One question I have is about why pricing in the selected Opportunity Zones seems to be a lot more volatile -- even before the Act was announced.
- Silicon Valley, Toronto, New York, and Los Angeles all added more than 10,000 tech jobs from 2016 to 2017.
- The biggest “momentum markets”, relying on 2016 and 2017 data, are Montreal, St. Louis, and Seattle.
- Over the past two years (Q2-2016 to Q2-2018), Atlanta, Los Angeles, Orange County, Seattle, and Portland have all seen double-digit rent growth.
One figure that also stood out for me was this one here showing the relationship between US venture capital investment and the average asking rent for office space in San Francisco.
If you’d like to download the full report, click here. You’ll need to sign up for an account with CBRE, but it’s free to do that.
My understanding is that the "not eligible" category represents census tracts with similar characteristics to the other two categories but, for whatever reason, were not eligible to become an Opportunity Zone. There are criteria.
The program is still quite new, but what Zillow found was that the eligible census tracts (green and yellow lines) seemed to exhibit similar sale price increases after the Act was signed, but before the final Opportunity Zones were announced. Once the final Zones were announced, sale prices in the selected category (green line) began to surge and move away from the pack.
This may be evidence that the tax benefits are starting to get capitalized, or it may not be. One question I have is about why pricing in the selected Opportunity Zones seems to be a lot more volatile -- even before the Act was announced.
- Silicon Valley, Toronto, New York, and Los Angeles all added more than 10,000 tech jobs from 2016 to 2017.
- The biggest “momentum markets”, relying on 2016 and 2017 data, are Montreal, St. Louis, and Seattle.
- Over the past two years (Q2-2016 to Q2-2018), Atlanta, Los Angeles, Orange County, Seattle, and Portland have all seen double-digit rent growth.
One figure that also stood out for me was this one here showing the relationship between US venture capital investment and the average asking rent for office space in San Francisco.
If you’d like to download the full report, click here. You’ll need to sign up for an account with CBRE, but it’s free to do that.
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