>> WELCOME
>> BACK TO GENERAL SHAKERS
EVERYBODY MORE VENTURE
CAPITALISTS ARE PUSHING THE
START OF THAT THEY ARE INVESTED
IN TO
GO THROUGH A DIRECT LISTING ONE
GOING PUBLIC THE LAST YOU KNOW
COMPANIES TO
DO THIS JACK AND SPOTIFY LAST
YEAR, RICK KLEIN IS PARTNER AND
CO-CHAIR OF GOODWIN'S CAPITAL
MARKETS PRACTICE HERE
WITH US.
>> GREAT TO HAVE YOU REPRESENT
CORPORATE CLIENTS ON THINGS
LIKE THIS VENTURE FINANCING AND
MONDAY.
THIS IDEA COMING FROM WISE TO
GAIN POPULARITY.
>> YEAH, I THINK SPOTIFY REALLY
KIND OF PUSH IT INTO PROMINENCE
JUST AS AN ALTERNATIVE TYPE HE
OWES I THINK IT WAS YOU KNOW A
LOT OF TIMES I P S COME OUT
THERE'S THE IPO POP AND
CERTAINLY BE SEAS OF FOCUS A
LOT ON THAT. SO THIS IS
BECOMING U-TURN THE WAY TO GO
PUBLIC TO AVOID THE IPO
POP BUT.
>> ONLY WORKS IF YOU DON'T NEED
TO RAISE MONEY AS A STARTUP
RIGHT AND I FEEL TRADITIONALLY.
YES
IT OBVIOUSLY CASHES OUT
INVESTORS RIGHTLY KWITY DEATH
BUT IT'S ALSO TRADITIONALLY
BEEN USED TO RAISE MONEY
SO BUSINESS CAN EXPAND SO THAT
GROWS WE CAN MAKE INVESTMENTS.
BUSINESSES CAN ONLY DO A DIRECT
LISTING IF THEY DON'T NEED THE
CASH DO THAT RIGHT I THINK THAT
THAT'S MOSTLY CORRECT. IT
YOU'RE NOT RAISING MONEY IN THE
DIRECT LISTING.
>> I THINK WITH THAT INCREASE
OF SOME OF THE LARGE PRIVATE
ROUND YOU CERTAINLY THE
SOFTBANK GROUNDS AND THE LARGE
PC LEAD ROUNDS.
THERE ARE A NUMBER OF COMPANIES
THAT DON'T NEED THAT TO RAISE
THE PRIMARY CAPITAL IS I THINK
THAT'S WHY THIS HAS BECOME
AN ALTERNATIVE FOR COMPANIES
WHO NEED THE CASH I THINK THEY
WILL HAVE TO CONSIDER WHETHER
DIRECT LISTING IS RIGHT FOR
THEM WHO COULD
GO PUBLIC AND THEN PLAN TO
RAISE MONEY LEADER AFTER THE
DIRECT LISTING WHAT WOULD THAT
LOOK LIKE WHAT IS WHAT ARE THE
MECHANICS
OF THAT YES SO WOULD YOU GO
PUBLIC THROUGH THE DIRECT
LISTING YOU PUT UP THE S ONE IT
STAYS UP FOR 90 DAYS.
AFTER THAT 90 DAY PERIOD YOU
COULD RAISE MONEY IN A
FOLLOW-ON OFFERING OF THE
CONVERTIBLE DEBT OFFERING LIKE
ANY OTHER
PUBLIC COMPANY.
>> THERE WAS EVENT LAST WEEK IN
SILICON
VALLEY, OVERSEAS, 7 HOURS.
YOU HAD HUNDREDS OF INVESTORS
TALKING ABOUT
THESE ALTERNATIVES THINKING
THAT MAYBE DIRECT LISTINGS ARE
A SIMPLER AND AND
MORE SOUP CARRIER WHAT DOES
THIS MEAN THEN FOR YOU KNOW IT
CHANGES LIKE THIS
THE NASDAQ.
>> I THINK FOR IT AND WE SEE IN
THAT SECOND IT'S REALLY EXACTLY
THE SAME FOR BUS
LOCKING SPOTIFY FOR
COMPANIES IS A DIFFERENT TIME
THAT I'M NOT SURE I WOULD SAY
SIMPLER I THINK IT WILL BE
RIGHT FOR A LOT OF COMPANIES I
DON'T THINK IT WILL BE RIGHT
FOR ALL COMPANIES TO RAISE THE
POINT OF NEEDING TO RAISE
CAPITAL. YOU ALSO NEED TO BE
VERY CONFIDENT YOU CAN HAVE A
LIQUID MARKET AT THE TIME OF
DIRECT LISTING BECAUSE YOU
DON'T HAVE THE LOCKUPS TO
PROTECT THE SHARES.
SO ALL THE PRE IPO SHARES ARE
SELLABLE AT THE DIRECT
MISSTATED SO IF YOU DON'T HAVE
THEM AND ON THE OTHER SIDE.
THAT GOT ME IMPACT THEM.
>> BE A MORE SOLID COMPANIES AT
THE RIGHT WAY TO THINK ABOUT IT
IF I DO THINK THAT IF.
>> YOU ARE MORE SOLID COMPANY
THIS IS A GOOD
ALTERNATIVE IF YOUR MAYBE
EARLIER STAGE CERTAINLY IF YOU
HAVEN'T FULLY FUNDED YOUR
BUSINESS PLAN I THINK THIS MAY
NOT BE THE RIGHT ALTERNATIVE.
>> LOSING OUT AND WE HEAR SO
MUCH TALK ABOUT DIRECT LISTING
SO BANKERS SHOULD BE WORRIED IF
THERE IS AN INCREASE IN DIRECT
MUCH WHERE THERE ARE THERE IS A
LOSER THE BANKERS WILL THEY
DON'T ACT AS UNDERWRITERS IN
THESE THEY DO ACT AS FINANCIAL
ADVISORS THEY STILL YOU KNOW
THAT THE FEES WERE DISCLOSED IN
THE ASWAN.
>> THEY STILL GET PAID. WELL,
I'M NOT SURE THERE'S A TRUE
LOSER I THINK
THE WINNER AND THE WINNERS ARE
A LOT OF TIMES THE PRE IPO
INVESTORS WHO DON'T HAVE THE
LOCK UP THEY CAN GET LIQUIDITY
IMMEDIATELY AND I THINK
THAT'S WHY THE EVENT LAST WEEK
IN SAN FRANCISCO, DREW SO MUCH
INTEREST FROM THE SIKH
COMMUNITY BANKERS DON'T GET
PAID.
>> AS BUT BY ALL THEY'RE ALSO
DOING AS MUCH MORE.
>> IF THEY DO NOT GET PAID AS
MUCH TO YOU, BUT IT'S CLOSE TO
AS MUCH WORK FOR NOT QUITE AS
MUCH HAVE.
>> ED WE COULD BE IN FOLLOWING
A YOU KNOW A TRADING
REVENUES ARE AND RIGHT NOW YOU
KNOW THESE BANKS ARE CUTTING
COMMISSIONS THE DEAL THOSE
REALLY
HAVE BEEN PART OF THE SAVING
GRACE FOR FOR A LOT OF
INVESTMENT BANKS.
IT THAT'S.
>> TRUE. I THINK YOU KNOW YOU
LOOK AT INVESTMENT BANKERS
MODELS THOUGH I PEELS ARE NOT
NECESSARILY THE CASH COWS, THEY
BEGIN THE RELATION TO PUBLIC
COMPANIES. THE M IN A
DEAL SUMMIT FOLLOW-ON OFFERINGS
WHICH WILL ALL STILL BE
AVAILABLE AS I THINK BANKS WILL
STILL PROSPER EVEN IF DIRECT