Jeremy Allaire, co-founder and CEO of Circle, speaks at the 2025 TIME100 Summit in New York on April 23, 2025.
Jemal Countess | TIME | Getty Images
Stablecoin issuer Circle stands to be one of the first significant cryptocurrency companies to go public in the U.S. That’s not the only unusual aspect of its IPO.
In Circle’s updated prospectus on Tuesday, the company said it would sell 9.6 million shares in the offering, while existing shareholders would sell 14.4 million shares. It’s exceedingly rare in a tech IPO for more shares to come from investors than the company.
Facebook was one of the few notable exceptions. In the social network’s massive 2012 IPO, which raised a then-record $16 billion, 57% of the shares were sold by existing stakeholders. Circle is even higher at 60%.
Circle, the company behind the popular USDC stablecoin, didn’t provide a reason for its decision, and a spokesperson declined to comment. The company is profitable, having generated $64.8 million in net income in the latest quarter. It had almost $850 million in cash and equivalents, and stands to raise another $240 million in the IPO, based on the midpoint of its expected range of $24 to $26 a share, according to Tuesday’s filing.
One reason for the hefty amount of insider sales is likely the extended stretch of meager returns for venture capital firms. After the market peaked in 2021, soaring inflation led to increased interest rates, pushing investors out of risk and forcing late-stage tech companies to forego IPOs, often slashing their valuations to raise money in the private market. Wall Street was bullish on an IPO boom when President Donald Trump took office in January, but few debuts have taken place.
Add it all up, and Silicon Valley’s tech investors are badly in need of liquidity.
“Private investors are desperate for exists so they can distribute back to their investors,” said Lise Buyer, founder of IPO consultancy Class V Group, though she said she isn’t certain of the company’s motivations. “It probably reflects a multiyear drought in IPOs and a strong desire by early investors to get some liquidity.”
Circle CEO Jeremy Allaire, who co-founded the company in 2013, is offloading about 8% of his stake, selling 1.58 million shares, according to the prospectus. Sean Neville, a co-founder and former co-CEO, is slated to sell 11%, as is finance chief Jeremy Fox-Green.
Venture firms Accel, Breyer Capital, General Catalyst, IDG Capital, and Oak Investment Partners are all scheduled to sell about 10% of their stock. While insider sales could present a troubling signal to Wall Street, Buyer said the investors’ remaining holdings show they’re still expressing belief in the company.
“The big guys are holding enough so they still have skin in the game, so that shouldn’t alarm investors,” Buyer said.
For most tech IPOs over the years, the percentage of float coming from investors has been significantly below half. In Reddit’s IPO, insiders sold 31% of the shares. The percentage was 36% for online grocery delivery company Instacart in 2023.
Sometimes it’s much less than that. CoreWeave, a former cryptocurrency miner that now rents out Nvidia chips, went public in March, with executives and other shareholders making up 2.4% of the shares sold. Back in December 2020, Airbnb investors accounted for about 3% of IPO shares, and in DoorDash’s IPO that same week, existing investors didn’t sell any stock.
During times when IPOs are hot and stocks are flying after their debut, investors are incentivized to hold and pocket the gains after the lockup period expires. That’s not today’s market, which helps explain why half the shares sold in stock brokerage firm eToro’s IPO earlier this month came from existing investors.
Exit activity for U.S. VCs rose almost 35% last year to $98 billion after hitting the lowest in a decade in 2023, according to the National Venture Capital Association and PitchBook. The peak was over $750 billion in 2021.
“This continuation of the post-2021 liquidity drought highlights persistent issues around exit pathways and investor behavior,” the NVCA wrote in its annual yearbook, which was published in March.
In some cases, companies need insiders to sell stock just so there’s enough float for there to be a market for trading. If Circle wasn’t including investors in its share sale, it would be offering less than 5% of outstanding shares to the public. For eToro that number was 7%.
— CNBC’s Ari Levy contributed to this report.
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