How do techies celebrate getting rich in a pandemic?

SAN FRANCISCO >> Things are so hot in Silicon Valley that it’s freaking people out.

As tech startups have rushed to go public and valuations have soared, Aaron Rubin, a partner at Werba Rubin Papier Wealth Management, said his clients were in shock over their newfound wealth.

When the pandemic hit a year ago, tech workers worried that their startup stock might never pay off. The whiplash, plus general unease about the economy, has now discouraged them from making the kinds of splurges that often accompany overnight fortunes, Rubin said. Compared with past booms, there is “more gratitude,” he said, and more plans for charity.

“Everyone is waiting for the other shoe to drop,” Rubin said. “Maybe they buy a new Tesla or convertible, but they don’t go out and start buying airplanes overnight.”

Silicon Valley’s cash-gushing, millionaire-minting initial public offerings have been bigger and buzzier than ever. But in the pandemic, the newly rich aren’t celebrating with the usual blowout parties and early retirement into round-the-world travel. They’ve adapted.

The parties are on Zoom, the tax talk is on Slack, the house shopping is slightly less intense, and the vibe is cautious. It is a weird time to become rich.

“People’s mindset is not in a place to be ostentatious,” said Riley Newman, who was an early employee at Airbnb, which went public in December and immediately topped $100 billion in value.

People have shifted their focus from vacation homes and flashy cars to suburban homes and schooling, said Newman, who now runs Wave Capital, a venture capital firm. “It is just different,” he added.

Over the past six months, at least 35 companies that were founded in the Bay Area including Airbnb, DoorDash and the data warehousing company Snowflake have gone public for a combined market value of $446 billion, according to a tally by The New York Times. Those companies’ “lockup periods,” which prevent insiders from selling most of their stock soon after an IPO, will expire in the coming months, unleashing a wave of wealth.

Just a handful of those IPOs could mint an estimated 7,000 millionaires, according to an analysis by EquityBee, a platform that facilitates startup equity transactions. The stream of IPOs has been large enough that tax income from them may wipe out some of California’s projected budget shortfall.

Party boxes

When tech startups went public before the pandemic, they celebrated with rocketshaped ice sculptures and fleets of 1980s bands.

Now companies are sending their employees party boxes for Zoom gatherings.

Daniel Figone, owner of Handheld Catering and Events, has recently delivered boxed dinners and snacks to homes for a number of workers at Silicon Valley companies that went public. The boxes — which cost $45 to $100 each — can include housemade rubs, finishing salts, hot cocoa mix, gourmet bark, fancy cheeses, fruit and Champagne. Inside, printed cards rivaling a wedding invitation detail the login code for a Zoom gathering. Top executives get even more: floral arrangements, three-course meals and an on-site chef to finish the cooking and plate it, Figone said.

But all-company Zoom celebrations can feel a lot like all-company Zoom meetings. So companies are also adding virtual Q&As with famous authors or “Saturday Night Live” cast members or inspiring talks from TED speakers, said Jay Siegan, who runs Jay Siegan Presents, an entertainment agency in San Francisco. If there’s a musician — Alicia Keys, Train and John Legend are top requests — the set is kept to one or two songs, he said.

‘Trophy homes’

In San Francisco, newly rich techies are migrating from modern “white box” apartments in the SoMa neighborhood to traditional prewar “trophy homes” in more established areas such as Nob Hill, Russian Hill, Pacific Heights and Sea Cliff, said Joel Goodrich, a real estate broker with Coldwell Banker Global Luxury. They are excited by historic mansions with elaborate moldings and architecture.

“After a major trauma in the world or the nation, a lot of times there is a turn to more traditional styles,” he said. “People want a sense of normalcy and solidity.”

Crypto and charity

J.T. Forbus, a tax manager at Bogdan & Frasco, a tax accounting firm in San Francisco, said his clients had mostly avoided showoff splurges. Their biggest expense, other than a house, is their financial adviser.

“If they do get crazy and spend, it’s investing in crypto,” Forbus said, referring to digital currencies.

Last year as Airbnb went public, former employees started Equity for Impact, a program in which employees pledge to donate an unspecified portion of their IPO proceeds to charity. So far, more than 400 people have committed around $50 million of shares, which is halfway toward the group’s goal of $100 million by the time Airbnb’s lockup period expires in June.