Good morning.
Maybe some dreams weren’t meant to die. Last week, Wiz CEO Assaf Rappaport sat on stage at the Fortune Brainstorm Tech conference amid rumors that Google parent Alphabet was about to buy his four-year-old cybersecurity startup for $23 billion. “If you asked any founder, definitely in the cyber space, two years ago, ‘Hey what’s your dream?’” he said. “I’m going to be unicorn, and then I’m going to become a public company” would have been the likely answer. But, he added, “the dream, a bit, has changed, and they’re seeing other options—and that pushes the market into consolidation.”
Or maybe not. On Monday, Rappaport sent a memo to employees, saying he’d turned down “offers we have received” and would instead pursue an IPO. Arriving the eve of Alphabet’s earnings, the letter’s timing suggested talks had continued up to the last minute.
So what happened? Several factors could be at play. Those reviewing the deal may have decided that it risked running afoul of antitrust regulators—a concern that reportedly killed Alphabet’s potential acquisition of Hubspot, too. Big Tech isn’t beloved on either side of the aisle right now. The massive IT outage caused by CrowdStrike, a Wiz competitor, may have changed the calculus. Or Rappaport may have decided that his company would be better positioned to achieve its goals as a public company.
Back in 2017, two days before his company AppDynamics was due to go public, founder Jyoti Bansal agreed to let Cisco buy it for $3.7 billion. Bansal has since launched two other companies and a VC firm, but he explained to me last night why he regrets making the Cisco decision. “Did we maximize our value? Probably not,” he says. “Our competitors who were our size at that time, like Datadog, became much more successful.”
Bansal doesn’t fault Cisco, which he says “did a great job of retaining people” and leveraging the company’s technologies when it bought the company. “But after two or three years, it’s just different.”
“I think about what we could have done there if we’d stayed independent.”
Equally important, he argues, there’s a public value in being a publicly-traded entity. “I believe companies should go public because broader society should be able to benefit from the value creation that happens through innovation.” Bansal said. “You create more accountability, more responsibility, more liquidity for your employees, more investors…It’s a healthier way to operate.” And, when markets are booming and the wind is at your back, it can be a better way to grow. That, too, can change.
More news below.
Diane Brady
diane.brady@fortune.com
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TOP NEWS
Vanceonomics
Vice-presidential nominee J.D. Vance’s economic policies will likely lead to a tighter labor market and greater protectionism, which economists see as a recipe for higher wages and inflation. Vance is also a fan of FTC chair Lina Khan and her tough stance on antitrust. But Vance’s VC backers might be more interested in his dovish stance on crypto; Vance is an owner of Bitcoin. Fortune
The best places for families
Fortune’s list of the best places to live for families have one thing in common: they are sustainable for both their youngest and oldest residents. “What we’re seeing is a longing of older people to age in place, and younger people, like Gen Z, to have a sense of place that they consider home,” says Jon Jon Wesolowski, an urbanist and housing advocate. No. 1 on the list is Silver Spring, Md., the D.C. suburb that features a thriving arts and restaurant scene, high-performing schools, and a tight-knit community. Fortune
Trump and Tesla
Tesla CEO Elon Musk believes a Trump win—and the possible repeal of EV tax credits—will be “devastating” to his competitors. Musk also suggested that he would rethink Tesla’s plans to build a factory in Mexico if the former president went through with tariffs on auto imports from Mexico. Tesla shares fell almost 8% in extended trading after it reported its fourth straight quarter of disappointing profits. Fortune
AROUND THE WATERCOOLER
Elon Musk denies reported $45 million a month pledge to Trump, says he doesn’t ‘subscribe to cult of personality’ by Eva Roytburg
The SEC bungled a crypto lawsuit. Then came an alleged kidnapping in Dubai—and questions about $400 million of investor funds by Leo Schwartz
Meet the CFO-turned-CEO driving record growth for cult-favorite energy drink Celsius by Sheryl Estrada
‘The system is not working for women’: Companies with return-to-office mandates are hemorrhaging female talent by Jane Thier
Commentary: Biden follows a long line of Western leaders who voluntarily surrendered power at the end of a ‘heroic journey,’ says the author of The Hero’s Farewell by Jeffrey Sonnefeld
This edition of CEO Daily was curated by Nicholas Gordon.