Newspaper article International New York Times

Courting Tech Companies, NASDAQ Builds a Nursery for Fostering Start- Ups

Newspaper article International New York Times

Courting Tech Companies, NASDAQ Builds a Nursery for Fostering Start- Ups

Article excerpt

Nasdaq is building a space aimed at teaching future generations of Mark Zuckerbergs how to create and run successful businesses.

The Nasdaq OMX Group has long courted technology companies as they seek to go public.

But its latest initiative is aimed at helping entrepreneurs well before they even consider taking their businesses to the stock markets.

In the South Financial District here -- close to a growing number of start-ups -- Nasdaq is in the midst of building what it calls its Entrepreneurial Center, a 13,000-square-foot space aimed at teaching future generations of Mark Zuckerbergs how to create and run successful businesses.

It is in some ways Nasdaq's own spin on "incubators" that help hatch and nurture nascent start-ups. But according to Bruce E. Aust, the Nasdaq vice chairman who is spearheading the center, it is also a natural extension of the stock exchange's longstanding interest in fostering a growing start-up community.

"This is really an area we have expertise in," Mr. Aust said in an interview. "We felt we could really create a great center to teach entrepreneurship."

Entrepreneurs and venture capitalists have done their best to resist or reduce Wall Street's entreaties, but it appears that a new relationship has begun to develop, leading to new fund-raising methods and innovations.

Still, the Entrepreneurial Center is also another weapon in Nasdaq's arsenal as it continues to battle its archrival, the New York Stock Exchange, for the hearts -- and listings -- of companies headed toward new lives as public companies.

The stakes for both exchanges are high. According to the research firm CB Insights, about 588 privately backed companies have valuations of more than $100 million, meaning that they are potential candidates for going public sometime in the next several years.

Among that group are highly visible, multibillion-dollar darlings -- so-called unicorns -- like Uber, the ride-hailing service; Spotify, the music-streaming service; and Dropbox, the online file- sharing giant, all of which could generate significant investor interest if and when they begin trading on a stock market.

Nasdaq has long held an advantage in courting tech initial public offerings, dating back to the tech boom of the 1990s. It still maintains a lead, with 118 offerings in the sector since 2010 compared with the Big Board's 109, according to data from Renaissance Capital. In virtually every year, Nasdaq's lead in tech offerings has been by fewer than five deals.

(Over all, the N.Y.S.E. has had 485 offerings during that time, compared with the Nasdaq's 451.)

But the N.Y.S.E. has won sizable mandates in recent years as it has heavily courted tech companies around the world. That campaign has won some notable trophies, including Twitter in 2013 and the Alibaba Group of China, whose public debut last year was the biggest on record, hitting $231 billion on its first day of trading. …

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