PALO ALTO, Calif. — Everyone dreams of striking it rich — and what they would do with such a windfall. A new house? A fancy car? Maybe designer clothes selected by a personal shopper.
For some in Silicon Valley, those wishes may soon come true.
As restrictions on selling stock are lifted at a handful of sizzling startups, early investors and employees are preparing for big payouts.
What they do with their riches is anyone’s guess, but luxury retailers and wealth managers say they’re expecting a bump in business and have been preparing for this new crop of Internet millionaires.
“We anticipate more activity over the next few months,” said Richard Levinsohn, manager at Porsche of Stevens Creek in Santa Clara. “A lot of these people will have new found wealth and they’re looking for a place to spend it. We’re only too happy to help.”
After a company goes public, financial regulations prohibit investors and employees who held shares before the listing to immediately cash out. That means companies that started trading on the stock
While only a wee slice of the population, these newly minted high-end spenders can make a difference in the luxury good bottom line, retailers say. They also infuse optimism in the market.
Gary Anderson, managing director at Fisker Silicon Valley/McLaren San Francisco, said the luxury car seller recently opened a location in Palo Alto because of faith in the market and its prospects for growth.
He said many of the current clients are established high-tech people but “we do expect that we will see a lot more of the younger people in the industry” as the technology sector rebounds.
Retailers and others are watching a handful of tech companies over the next several months since the IPO market appears to be thawing.
Wealth windfalls following hours of hard work at a hot startup are part of the culture of Silicon Valley. Those days seemed long gone, but after months of economic volatility and a floundering IPO market, the promise of big payouts is re-emerging.
San Francisco Bay area-based personal shopper Jennifer Margolin said she’s noticed that this time around, people in technology are paying more attention to style and craftsmanship, which mirrors the move in the industry to create sleek, fashionable products.
And when they move to a new tax bracket, more people seek her services.
“Now they’re going to black-tie galas,” she says. “They don’t have the first clue what to wear.”
Technology writer Michael Liedtke in San Francisco contributed to this report