With SpaceX trading around $2 trillion, Anthropic raising at a $965 billion post-money valuation, and OpenAI is expected to follow, we’re in for a hot IPO summer.
Add in a steady stream of smaller offerings—from Jersey Mike’s to Bending Spoons—and wealth advisors are bracing for a fairly compressed window in which employees who joined these companies on modest salaries are about to become extremely, suddenly rich. While Fortune is looking to coin “IPO Bros” for this special class of soon-to-be-filthy-rich cohort, they also present a category of client that family offices haven’t dealt with at this scale before.
“I don’t know what are we calling them, like I feel like we need like a term for them,” Catherine Fankhauser, a partner and practice leader for family enterprise and family office advisory services at EY, told Fortune before the conversation landed, half-jokingly, on “IPO bros.” She said regardless of the name, “you don’t take a course in college that tells you how to be an ultra-high net worth individual”—so these newly wealthy employees need to get their finances in order fast.
Whatever the label ends up landing, both Fankhauser and Peter Epstein, a managing director at Allocate—a firm that helps registered investment advisors and wealth management firms access private-market investment opportunities—described this group as rather distinct from the ultra-wealthy client family offices already know. Now, as a hot IPO summer enters full swing, we’re posing a question for family offices and these new UHNWI alike: What to do with all this new wealth?
“I think it’s much broader than that, in terms of this really being a compressed wealth creation window, inclusive of potentially Anthropic, potentially OpenAI,” Epstein told Fortune. He pointed to the scale of it as the real story: Facebook went public in 2012 at roughly $100 billion, and Google and Amazon went public in the late 1990s at valuations far below that. SpaceX’s $2 trillion figure, he said, reflects “a significant amount of runway that’s now essentially generating that return potential within private markets that historically wasn’t the case.”
An industry retooling for a new set of clients
That scale is exactly what’s forcing family offices and wealth managers to treat this year’s IPO class as its own category. “Irrespective of whether it’s a janitor or an executive, that’s still a concentrated stock position in terms of their equity exposure within that respective company,” Epstein said, noting lifestyle planning, liquidity management, retirement planning, and tuition costs all get more complicated when that position is worth tens of millions of dollars overnight.
Fankhauser said the infrastructure now absorbing this new class of wealth didn’t spring up overnight. Instead, it’s the product of a five-to-seven-year buildout tied to a broader run of liquidity events and SPACs.
“It’s been a trend that we’ve been seeing for the last several years that the marketplace has had an influx, a really significant influx,” she said. That means today’s newly wealthy employees are stepping into a far more built-out system than earlier generations of the newly rich had access to.
“They’ve got the opportunity to really stand on the shoulders of those who came before them in a way that wasn’t possible maybe 10, 15 years ago,” she added.
Much of that infrastructure now lives inside banks and financial institutions that have built out captive family office services like technology, accounting, bill pay, and art advisory, which were originally meant to deepen relationships with existing billionaire clients. Newly liquid employees, Fankhauser said, can often plug into those same bundled services even if their own payout wouldn’t justify standing up a single-family office on its own.
But access to the infrastructure is only part of the shift. Family offices are also changing how they build trust with this cohort, Fankhauser said, pointing to the now widely known story of an early tech-company employee who worked in a company cafeteria before an IPO made her wealthy.
“If you’re in a position where you may be less familiar with the types of products that are out there or the choices you have, having someone there to provide advice to guide you feels a little bit more comfortable than you trying to get educated yourself,” she said.
Founder money, not inheritance money
The bigger behavioral shift family offices are adjusting to, Fankhauser said, is that this new wealth doesn’t act like inherited wealth.
“There’s something about that entrepreneurial spirit where the structure of a family office doesn’t always feel great,” she said. “If I’m a founder who’s used to running through walls and breaking a lot of glass along the way, structure may not always be the best fit.”
Whether that founder mindset persists among this summer’s newly liquid employees or eventually gives way to a more conventional, structured approach to generational wealth is still an open question, she said: “I’ll be interested to see where the distribution falls.”
Epstein noted companies like SpaceX, Anthropic, and OpenAI had already given employees chances to sell shares through tender offers as private companies, so for many, this isn’t their first liquidity event. But going public, he said, is still “a very significant moment,” both for wealth and estate planning and for what employees decide to do with their careers next.
This, both he and Fankhauser said, will be the biggest distinction between how family offices worked in the past to preserve wealth, as opposed to these “IPO Bros” who are less risk-averse and more likely to found their own companies. Epstein pointed to Facebook’s 2012 IPO, after which many employees went on to found their own companies, start venture funds, or launch private market platforms.
“I think that unlock is underestimated in terms of what do those employees not just do with the current liquidity, but what do they think about as part of the next phase of their careers,” he said.
“Talking about SpaceX in particular, there are some incredibly talented employees that are there that I think could be very well become the next generation of founders that could be in areas like defense tech, that could be in areas like what does space look like over the next 10 years,” he added. “Those employees essentially become the next wave of founders.”
