1. Market standard - Fixed 180 lock-up (93% of IPOs fall here); not to forget, a large number of Tech IPOs will execute a follow-on offering within 180 days.
Alternative structures
2. 180 day with blackout pull forward - 180 days with the ability to accelerate if the blackout window falls within the lock-up period (3% of IPOs). This allows pre-IPO shareholders to sell pre-blackout period (Crowdstrike, Datadog, Peleton, Cloudflare, Lyft, Bill.com)
3. Price triggered - this is basically standard 180 day with early price trigger release (~2% of IPOs). Companies use a combination of time, performance and %ge holding to optimize (Lemonade - 33% price trigger and 33% holding, Zipcar - 50% price trigger and 33% holding, elastic - 33% price trigger and 25% holding, Stitch fix - 25% price trigger and 35% holding)
4. Extended release - Different shareholders or groups of holders allowed to sell at various dates post IPO ( 1% of IPOs). This allows smooth transition of stock (Etsy - 180, 270, 360 days, Alibaba - 90,180, 365 days, facebook - 90, 150-179, 180, 210, 365)
Lock-up period has many flavors -
1. Market standard - Fixed 180 lock-up (93% of IPOs fall here); not to forget, a large number of Tech IPOs will execute a follow-on offering within 180 days.
Alternative structures
2. 180 day with blackout pull forward - 180 days with the ability to accelerate if the blackout window falls within the lock-up period (3% of IPOs). This allows pre-IPO shareholders to sell pre-blackout period (Crowdstrike, Datadog, Peleton, Cloudflare, Lyft, Bill.com)
3. Price triggered - this is basically standard 180 day with early price trigger release (~2% of IPOs). Companies use a combination of time, performance and %ge holding to optimize (Lemonade - 33% price trigger and 33% holding, Zipcar - 50% price trigger and 33% holding, elastic - 33% price trigger and 25% holding, Stitch fix - 25% price trigger and 35% holding)
4. Extended release - Different shareholders or groups of holders allowed to sell at various dates post IPO ( 1% of IPOs). This allows smooth transition of stock (Etsy - 180, 270, 360 days, Alibaba - 90,180, 365 days, facebook - 90, 150-179, 180, 210, 365)
Vibhor
Great data. Directionally same as I have seen. Is there a source behind your data you can share? A report somewhere?
well, with respect to Fraud, wouldnt Rippling fall in the same bucket? the CEO of Rippling has the same challenge.
https://sites.law.berkeley.edu/thenetwork/2017/11/11/sec-fines-zenefits-and-former-ceo-parker-conrad/