Raymond James Private Capital Advisory Global Head says Reddit’s IPO is a big deal far beyond the social media market.

“Investors, especially institutional investors and private equity investors are watching this IPO very closely to see if it does open the markets up, the markets having been shut for almost 18 months now,” Haldea told CNBC.

“There are nearly $3.7 trillion worth of assets sitting in private equity, that includes buyout, growth capital, venture capital, investors’ books, many of the largest of which need to be coming to the market to access IPOs.

“So this is being watched very carefully to see what the appetite is like, how does it perform, and does it mean that many more companies can come out or not.”

When asked why there was so much caution when the economy is doing so well, Haldea pointed to continued uncertainty for the future.

“While we know the Fed is likely to cut rates in the second half of this year, we still have interest rates at highs and we know investors have ridden the indices to record highs. The question is: Will they take profits from some of the index performance…and revolve them into other risk plays, including IPO?”

In addition to questions about investors’ willingness to back IPOs, Reddit’s business model is testing the waters in another important way. The company’s entire business is built off of content that is generated entirely by unpaid users. Even more unique, even in the world of social media, Reddit’s moderation is handled almost entirely by unpaid volunteers.

The recent protests in response to Reddit effectively killing off popular third-party apps demonstrated the potential challenges involved in building a business off of free content and relying on free labor to manage it.

Adding to the company’s challenges is an FTC inquiry into Reddit’s deal with Google to share user-generated content for AI training.