Ripples from nCino’s initial public offering last July may be lapping at the shores of the local economy.
 
The banking software company’s post-IPO lockup period ended Jan. 11. That means that initial investors, directors and employees are free to sell shares they have held during that time. And numerous nCino (Nasdaq: NCNO) officials and employees are doing just that, according to reports filed with the Securities and Ex­change Commission on Jan. 11 and afterward.
 
Some of these recent transac­tions represent shareholders exercising stock options, or the ability to buy or sell shares at a specified price for a specified period of time. nCino employees, for example, might be able to purchase a certain number of shares at a low price and sell them at higher current market rates.
 
This can put new money into the local economy for tangible purchases (a new car, a new house) or it can provide money for further business investments, from seed money for startups to venture capital for matur­ing companies.
 
“I’m extremely excited about the positive economic impact nCino’s IPO will have on our community,” Wilmington Chamber of Commerce President and CEO Natalie English said in an email. “Strong economic growth in any local economic sector generally leads to improved econom­ic conditions across the board. As local industries like our fintech sector continue to report growing output, local businesses’ revenue should increase, which can spur wage and employment growth in other areas.
 
“The specific growth in income re­lated to this, and future, IPOs will be felt across our community through investments in real estate, entrepre­neurial endeavors and our communi­ty’s nonprofit organizations working to create a better place to live, work and play.”
 
Adam Jones, regional economist with the University of North Caro­lina Wilmington, notes the absence of much research on the effect of post-lockup activity on local econo­mies. He theorizes that shareholders who gain liquidity might spread out their purchases over time, meaning the local market is “not going to have some big blip.”
 
While some shareholders will use earnings for lifestyle upgrades or even 401(k) or college fund invest­ments, he said, “A lot will be capital that goes into the next venture, to grow more companies. Investors are simply getting their capital return and are going to [invest] again. And that is beneficial to the economy.”
 
For entrepreneurs at nCino and elsewhere, Jones added, “The piece that’s exciting in life is building those companies, those teams. They are fo­cused on a completely different game from the rest of us. They use [post- IPO returns] to generate money for seed capital for their next project or to invest in companies of their em­ployees. There will be [employee-gen­erated ideas] that don’t quite fit in the scope of what nCino is going to do but for which the employee has talent – so a spinout.”
 
In the economic development world, Jones said, people talk a great deal about industry clusters and how they get started.
 
“Some start around universities where there are one or two specific faculty members who have ideas to commercialize, and others spin off around it. We are seeing that in Wilmington, not from the university, but driven by a small group of entre­preneurs. The cluster takes on a life of its own.”
 
When we think about assets gen­erated by an IPO, sometimes we miss the big picture, Jones pointed out.
 
“The big picture impact is the company,” he said. “It’s going to keep people hired and keep spitting out jobs and paying salaries.”
 
nCino, which boasts more than 1,200 customers and employs more than 900 people – the majority of whom work at its Wilmington head­quarters – has shown rapid growth since it was spun off from Live Oak Bank in late 2011. In an indicator of its continuing growth, plans were filed in late January for construction of another 90,000-square-foot office building.