Airbnb Inc.'s long-awaited Wall Street debut is officiallyearmarked for 2020, but thehome-share startup is charting an unconventional path to the publicmarkets.

San Francisco-based Airbnb is laying the groundwork for a directlisting rather than an initial public offering (IPO), according topeople familiar with the matter who asked not to be nameddiscussing private information. Airbnb declined to comment.

Technology startups usually choose a traditional IPO to tap into thepublic markets. However, some of the new generation of tech firmshave spent years raising private funds and don't necessarily needmoney from an IPO to expand their business. They are going publicbecause they are looking for a way to let employees and investorscash out.

A direct listing enables companies to lower the millions ofdollars they typically pay to investment banks in underwriting feesfor an IPO, because they don't issue any new shares and don't raiseany new capital. Instead, they let the market choose the price.Slack Technologies, Inc. and Spotify Technologyhave taken the direct listing route.

An IPO would also force Airbnb to open its books to investors.The We Co., which was supposed to have an IPO this fall, had towithdraw its plans after some investors took a look and were highlycritical. Amid the ensuing scrutiny, the CEO was forced to resignand financial advisers said WeWork's potential valuation wouldlikely fetch only about a quarter of its earlier $47 billion.

On Tuesday, hundreds of venture capitalists and executives fromprivate companies will meet in Silicon Valley to discuss thebenefits of direct listings. The event is sponsored by 12 venturecapital firms and will include Mike Moritz of Sequoia Capital, thebiggest venture capital backer of Airbnb; Benchmark's Bill Gurley;and Spotify's CFO, Barry McCarthy.

With a private valuation of $31 billion, Airbnb is likely to bea topic of discussion. It's slated to be one of the mosthigh-profile companies to go public next year.

Airbnb executives have been talking about an IPO since at least2018 and the extended timeline has caused tension inside thecompany. Last summer, a handful of former employees sent a letterto Airbnb's founders pleading for a public offering so they couldsell their stock options—some of which start expiring in November2020, according to the New York Times. Earlier last year, CFOLaurence Tosi left the company after butting heads with CEO BrianChesky, in part over the timing of the IPO.

Last month, Airbnb officially announcedit would go public in 2020 in a one-sentence press release. Thecompany didn't give any additional details on the timeline orwhether it intends to file for an IPO or take the direct listingroute. So far this year, Airbnb's fellow tech unicorns that havegone public have received a chilly reception. Uber TechnologiesInc. is trading at 30 percent below its IPO price, Lyft Inc. isdown more than 40 percent, and Slack is down almost8 percent.

Unlike these unprofitable companies, Airbnb has a strongerfinancial position. In the last quarter, it pulled in more than$1 billion inrevenue, and the company has said its earnings before interest,taxes, depreciation, and amortization (EBITDA) were positive inboth 2017 and 2018.

Venture capitalist and Uber's former political adviser BradleyTusk says a direct listing would be more beneficial for Airbnb,which is now an 11-year-old company. (Tusk also ran the 2009mayoral campaign of Michael Bloomberg, the owner of Bloomberg'sparent company, Bloomberg LP.)

"What we've seen with Uber, Lyft, and the other big ones is thatwhen you're private for so, so long, you don't get any honeymoon bythe time you go public," Tusk said. "Given the struggles so manytech companies have had in the past year and a half, it's notshocking they might want to try something different."

As Airbnb prepares for its entrance into the public markets, oneof its major hurdles is solving outstanding regulatory issues insome of its biggest markets, like Paris and New York City, whereits business model of short-term home rentals has been at odds withthe city for a decade. Investors want Airbnb to solve itsregulatory battles before going public, since failure to do socould cast doubt on the company's valuation.

David Hsu, a professor at the University of Pennsylvania'sWharton Business School, says that bypassing the roadshow that goeshand in hand with a traditional IPO means Airbnb "wouldn't have toretell the story and expose wounds that are already there."

However, the company could experience more price volatility inits stock because it hasn't been as well-vetted and wouldn't havethe support of an underwriter. "The direct listing is super new,but it may well be appropriate for Airbnb," Hsu said. "They arealready a well-known business model because lots of people havestayed in an Airbnb, so this theoretical danger of volatility inthe price may not be that significant."

Dennis Schaal, founder of online travel analysis site Skift,says he would bet on Airbnb doing a direct listing. "What's clearfrom its history is that Airbnb executives like to do things theirown way," Schaal wrote in a recent column. "If thecompany can avoid the well-worn and costly initial public offeringroute that many of its peers have slogged through, and go for adirect listing instead, then that would be another jab atmainstream practices, make employees happy, and would fit in nicelywith the Airbnb startup narrative and culture."

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