Latest / The Startup Exit Podcast with Fexingo: IPOs, Acquisitions, and Founder Liquidity Events / How RIVN and ARKG Signal a Shift in Growth Investing
Transcript
- Lucas: So Rivian is up more than six percent over the past five trading days. Not a huge move in absolute terms, but look at the broader context — it's a stock that lost something like 90 percent from its peak and has been mostly drifting for months. That kind of jump catches my attention. Luna: And it's not alone. ARKG, the Ark Genomic Revolution ETF, is up over nine percent in the same window. That's not just noise. Lucas: Right. And the thing is, both of these are classic long-duration, high-conviction growth stories — one's an EV maker that's still losing money, the other is a basket of pre-profit biotech and genomics companies. They got absolutely hammered when rates went up. But now, with the Fed on hold and the market starting to price in potential cuts later this year, these names are coming back. Luna: So are we seeing a genuine rotation back into growth? Or is this just a relief rally that fades? Lucas: I think it's early innings of a rotation. Look at the macro setup. The ten-year Treasury yield has settled in around four-point-two percent, down from the five percent highs. That's a big deal for stocks whose value is mostly in cash flows five or ten years out. When the discount rate drops, their present value goes up. Luna: And that's exactly the math behind ARKG and Rivian. Their valuations are almost entirely dependent on terminal value assumptions. Lucas: Exactly. Now, I don't want to overstate it — we're talking about a five-day move. But it's consistent with what we're seeing in the IPO pipeline. There's chatter that several late-stage startups are dusting off their S-1s, and the bankers are telling them the window is cracking open. Luna: Which brings us to the show's core question: if you're a founder sitting on a private company that's been waiting for the right moment to go public, what do you make of these signals? Lucas: You want to be early, not late. The mistake founders made in 2021 was thinking the window would stay open forever. It slammed shut. The ones who went out when comps were frothy locked in huge valuations. The ones who waited got caught. Luna: So the lesson is: when you see names like Rivian and ARKG start to move, it's a leading indicator that public market appetite for risk is returning. You don't wait for the IPO to price at the top — you start the process while the window is still opening. Lucas: Precisely. And there's a second layer here. Look at the ARKG move. That fund is essentially a basket of companies that are years away from profitability. If investors are willing to pay up for those again, it suggests a broader risk-on shift. That benefits not just biotech, but any high-growth sector — enterprise software, fintech, climate tech. Luna: But the IPO market isn't just about sentiment. There's also the supply side. A lot of venture-backed companies have been staying private longer, doing secondary sales to provide employee liquidity without an IPO. That's been a theme on this show before. Lucas: Right, and that's actually a signal too. When the secondary market starts heating up — we've seen platforms like Forge and EquityZen report higher volumes — it often precedes a wave of traditional IPOs. The smart money starts positioning. Luna: So if you're a founder watching Rivian and ARKG, you should be thinking: is my company ready? Do I have audited financials? Have I lined up underwriters? Lucas: And more importantly: do I have a story that works in this environment? The 2021 playbook — growth at any cost, big TAM, no path to profit — that's not coming back. Investors now want to see a credible path to cash flow positivity within a reasonable timeframe. Rivian, for all its struggles, has been hitting production milestones and narrowing losses. That matters. Luna: And ARKG's underlying companies — many of them have actual revenue growth, even if they're not profitable. The market is rewarding execution, not just promises. Lucas: That's the through-line. So if you're a founder listening, here's my take: the macro winds are shifting. Not dramatically, but perceptibly. Use this moment to get your house in order. Because when the window opens fully, it might not stay open long. Luna: Quick honest thing — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making a show like this possible. No ads, no sponsors, just listener support. If these conversations are useful for what you're building, that's the only reason we get to keep doing them. Lucas: Yeah, and we mean it. We don't have a big media company behind us. It's just us and the people who find value in the show. So if you're one of those listeners, thank you. And if you've been meaning to throw in, there's no better time. Luna: Alright, back to the data. One more number that stood out: Tesla is up almost four percent in the same five-day window. That's interesting because Tesla is the bellwether for EV sentiment overall. If Tesla rallies, it lifts the whole sector. Lucas: And Rivian moves in sympathy, but also on its own fundamentals. They just reported that they're on track to hit their full-year production guidance. That's credibility. Compare that to some EV SPACs that never delivered — Rivian is actually building trucks. Luna: So the rotation is real, but it's selective. You need proof of execution. Lucas: Exactly. And that's a healthy market. In 2021, everything with a 'disrupt' tagline went up. Now, only the ones with real traction are recovering. That's actually a better environment for serious founders. Luna: And for investors looking to back IPOs. The next crop of public companies will be stronger because they've had to survive a down round or a valuation reset. Lucas: That's the silver lining of the 2022-2023 correction. The companies that are still standing are leaner, more focused, and more capital-efficient. When they do come to market, they'll be better positioned to generate real returns for public investors. Luna: So keep an eye on ARKG and Rivian. If they hold these gains or push higher, it's a green light for growth IPOs. Lucas: And for founders, it's a reminder that your public comps are speaking to you right now. Listen to them. The window is opening.