Bill Gurley – Direct Listing vs. IPOs – [Invest Like the Best, EP.144]

My guest this week is Bill Gurley, general partner at Benchmark Capital. Our conversation is about one specific issue that has popped up as a topic of interest in the investing community in recent months: the comparison between bringing a company public through a traditional IPO vs. what’s know as a direct listing.

This episode is very much in favor of direct listings instead of traditional IPOs. For those that want a good discussion of the IPO process and its upsides, check out episode 173 of the Exponent podcast with Ben Thompson, which I’ll link in the shownotes.  Now please enjoy my very interesting conversation with Bill Gurley

Show Notes

Show Notes

1:40 – (First Question) – His view on the IPO process

6:00 – Will now be the turning point for IPO’s

6:58 – The engagement between a new company going public and their counter party and the IPO process

13:56 – The math of capital costs

18:36 – Banks that underprice the IPO’s

21:03 – The psychology of IPO’s

23:32 – The pop in the IPO and the media

25:01 – The value that shareholders give vs VC’s

25:55 – The Green Shoots

28:35 – The lock up

31:58 – Direct listings vs IPO’s

            36:07 – Spotify’s CEO Reveals Why He’s Not Doing a Traditional IPO

38:41 – The capital raised in an IPO and diluting the company

40:36 – Privilege access and buy side firms

43:51 – What will actually lead to changes in the IPO space

45:16 – Why he became so interested in the IPO space