That could be yet more bad news for a slew of Silicon Valley unicorns — valued privately at $1 billion or more — eyeing an IPO in 2016.
Highly valued start-ups are under scrutiny after reports shed light on the acquisition of Good Technology, which saw the values of its shares plummet as it moved away from a plan to go public. The company's case revealed a snag in the realities of equity agreements and challenges of diversifying private stock.
"A lot of these so-called unicorns have a ton of preferences, a ton of structured equity on top of that," venture capitalist Hany Nada told "Squawk Alley" on Wednesday. "Even if these companies do sell at $1 billion or more, the payouts to the common stockholders can be pretty low. "
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Though a subset of highly valued companies are solid, others are "built on fluff and hype," and could fall away from the public market in the next year, said Nada, who is co-founder and managing partner of GGV Capital. In those cases, equity-holding employees can bear the brunt of a down round or discounted acquisition, as detailed by a recent profile of Good Technology in The New York Times.
"This is the Valley, right? Everybody puts all their eggs in one basket," Nada said. "Often times, they win big. And often times, they do not."
Disclosure: FBR acts as a market maker or liquidity provider for Apple.
— CNBC's Julia Boorstin and Reuters contributed to this story.