Capital Markets Transactions

Dropbox Inc., was one of the first unicorns, or privately-held startups valued at over $1 billion, to hit public markets in 2018. At the time, many other well-known companies were eyeing the public markets but hadn't acted yet.

San Francisco-based Dropbox is well known for its file sharing and storage cloud computing technology, so the deal garnered lots of interest.

"Obviously, it was a very high profile deal, which means that everything will be scrutinized," said Tony Jeffries, a Palo Alto partner at Wilson Sonsini Goodrich & Rosati PC, who led the team advising Dropbox in the deal. "I get the sense that the Securities and Exchange Commission looks at high-profile deals more carefully."

"Clearly there's more media attention to high profile deals, more picking apart the disclosures, the business model, anything the company is doing elsewhere, what happens to the company while you're in the midst of the IPO process," he added.

Kevin Kennedy of Simpson Thacher & Bartlett

The transaction was "the harbinger of things to come," for other Silicon Valley companies hoping to go public, said Kevin P. Kennedy, the lead partner at Simpson Thacher & Bartlett LLP, counsel for the underwriting syndicate.

"You've never had a period in the Valley or anywhere for that matter where you had this many valuable, really sophisticated, really mature companies who clearly had the option to go public and chose not to," Kennedy said. "They could have gone public long ago, but they chose to wait, so the dynamic has been very interesting. As a result of Dropbox being the first, I think firms were viewing this as a test case a bit for some of the deals that were about to come down the pipe," he added.

Shares of Dropbox stock debuted on Nasdaq on March 23 under the "DBX" symbol. The IPO included 36 million shares of Dropbox common stock initially priced at $21 per share. By end of day, the stock was selling at $28.48, a more than 35 percent increase.

"I think it was well received by the market and, I like to believe, gave confidence to the other unicorns to maybe follow suit," Kennedy said. "You're starting to see a few of those hitting the market now and probably more to come in the next 18 months or so."

Rideshare giant Lyft Inc. announced plans for its initial public offering this month.

Some of the other well-known companies to go public in 2018 after Dropbox include SVMK Inc., the parent entity for SurveyMonkey, a global provider of survey software products; Eventbrite Inc., a ticketing and event technology platform and DocuSign Inc., known for its electronic signature technology.

For attorneys working on the Dropbox IPO, the pressure of such a large and influential deal was entirely in the background. With all-star legal teams on both sides and a remarkably well-prepared company, preparing Dropbox's first public offering was a smooth process, attorneys said.

Kennedy and Jeffries praised the Dropbox team for care they put into every step of the planning process.

While most companies are fairly young when they go public, Dropbox had been preparing and practicing in the years leading up to the formal initial public offering, Jeffries said.

"We derive a lot of satisfaction from having a chance to work with great companies," Jeffries said. "Every deal has its days that are hard, but I really don't remember any bad days on this deal. The people there were such a joy to work with that even if something came up and had to be dealt with and you have to work until 2 a.m. on it, you felt like you were doing it with people you knew and respected and they were right there with you."

-- Nicole Tyau