The New York Times reports that the impending public offering of the company formerly known as Snapchat is drawing excitement from many of the city's money managers, eager to assist Snap's 1,900 employees as some of them prepare to become millionaires for the first time.
"What we have not had is our Google moment," Blaine Lourd, founder of wealth management firm LourdMurray, told the Times. "The real estate guys are pumped because the first thing people usually buy is a house, or a dream home," he added. It may also spark a startup boomlet in the City of Angels, suggests Mark Suster, the founder of Santa Monica venture capital firm Upfront Ventures.
Of course, the people who will get the biggest payouts are Snap co-founders Evan Spiegel and Bobby Murphy, who would each have stakes in the company worth more than $3 billion if Snap debuts at its expected value of between $19.5 billion and $22.2 billion. They'll surely land atop the 2016 tally of the world's billionaires, of which there were 2,473 in 2015, up 6.4 percent from 2014.
A Snap employee told the Times that the company was looking at ways to educate employees on financial management before the IPO, such as bringing in professors from Stanford to talk about how employees' lives can change after working for a company that goes public. Howard Rowen, a financial adviser at Bank of America in Los Angeles, told the Times that Snap's employees should think of this moment as a "once-in-a-lifetime" opportunity.
To be sure, the Los Angeles startup community has seen a number of successful exits in recent years. Dollar Shave Club was acquired by Unilever for $1 billion in 2016, while Disney acquired Maker Studios in 2014 for $500 million. Snap's IPO would be the largest exit for an L.A.-based tech startup by far.
The biggest question mark that remains is just how much of the money from Snap's IPO will get funneled back into the Los Angeles tech scene. If Snap spawns something like the "PayPal mafia"--PayPal alumni have gone on to launch billion-dollar companies like Palantir, LinkedIn, and Yelp--the Los Angeles startup community could give Silicon Valley a run for its money. Nonetheless, Suster tells the Times he's confident that "those employees recycle their capital back into the ecosystem."