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22 Dec, 5 tweets, 2 min read
A wonderful 2020 Xmas present to the founders, employees, & investors at VC-backed startups. SEC just APPROVED the ability to add primary capital (fundraise) to a direct listing. It's very exciting to see the SEC enable innovation in this way. (more) sec.gov/rules/other/20…
This is HUGE & will hopefully end 40 years of mispriced IPOs through an old antiquated process that failed to match supply/demand & wasn't open to all investors. 2018:$6B in underpricing. 2019 $7B. 2020, new record => $34B in one day gains for i-bank customers with allocation.
The SEC properly honed in on the two key advantages of a Direct Listing. The first key point is "open access to all investors." Hot IPO access is limited to a few selected ibank customers. Now anyone can participate.
The second superiority of the Direct Listing as actually matching supply & demand to determine price and allocation. It's surprising we haven't done it this way all along, but no better time than the present!
Lastly - here is the final paragraph and the conclusion. All 100% consistent with what is "right" and "fair" for our public markets. Thank you so much to the SEC for making this happen. Very proud of our government today. 😎😎😎😎😎

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More from @bgurley

Bill Gurley Profile picture
30 Sep
Congrats to @moskov & team @asana as well as Alex Karp & team @PalantirTech on their respective Direct Listings today. Also thanks to team at Morgan Stanley (big supporter of DLs), @stacey_cunning & team @NYSE who make this work so well, & Citadel (DMM).
Fixing the IPO problem was first championed by icons like Pierre Omidyar (Ebay), & Larry/Sergey (Google) who all felt IPOs should be "open to all." Then Barry McCarthy/@eldsjal (@Spotify) broke open the DL door (w/ tons of hard work), & @stewart (@SlackHQ) widened that doorway.
Our entire industry benefits from the work of these pioneers; we owe them all our gratitude. Michael Moritz said "the choice of a direct listing or a traditional IPO has become a test of two attributes: courage and intelligence." The "courage" part is the hardest of the two. 🙏
Read 4 tweets
Bill Gurley Profile picture
23 Sep
Been meaning to make this recommendation for some time, & as with "Range," I am several months late. I really, really loved "How Innovation Works" from @mattwridley It is a very elegant follow up to "The Rational Optimist" - read both if you can. (more) amazon.com/How-Innovation…
One of the most amazing things about both books is Matt's ability to connect the dots across very long time horizons. Very few can. He also has the ability to combine thinking from many fields - most notably science, technology, psychology, & a heavy dose of microeconomics.
Relative to our world in Silicon Valley, Matt shows how "what we do" is not new, but a very old (and critically important) process. He refers to idea generation as "invention," & notes that successful "go to market" (which he calls innovation) is far more important. Agree 10x!
Read 6 tweets
Bill Gurley Profile picture
16 Sep
Some encouragement to comment on $SNOW IPO. While it would be easy to do normal post wrt mispricing, it is important to understand what is different here from other IPOs. The most important data is broad (40 years of underpricing, 2020 worst year yet), vs. 1 company. [cont]
First, its important to acknowledge that @SnowflakeDB is an amazing outlier, & proof of the innovation that develops from this great place we call Silicon Valley. Hats off to the employees, Frank Slootman, @laserlikemike, @altcap, @carl_eschenbach, & all those involved. [cont]
Outside of if the company/shareholders "gave up" anything, the hand allocated investors received $4.3B is one day wealth transfer. That's an insane amount of REAL money. That, along with watching the theatre and drama today, it is HARD to say - this is exactly how it should work!
Read 8 tweets
Bill Gurley Profile picture
14 Aug
For those of you on the AB5 beat, important to know that the #1 driver behind this legislation is organized labor. "However, the reality is that AB5 was drafted by a union organizer, and this bill was designed as a way to grow union membership." latimes.com/socal/daily-pi…
Today no drivers are unionized, but the SEIU and others want them to be. Vox has a deeper dive here, outlining decades of history behind this push. vox.com/2019/9/11/2085… Important to know that its not actually coming from a large % of the actual drivers themselves.
Here's even more proof. When musicians (who are unionized) wanted out of AB5, they were quickly let out. ocregister.com/2020/04/17/mus… Love the title, "Music industry, lawmakers, unions agree on revamp to AB5." At least it shows you clearly who writes legislation in Sacramento.
Read 4 tweets
Bill Gurley Profile picture
10 Aug
Are those that are evaluating AB5 aware of all the carve outs? Is this an attack on ride-sharing & food delivery specifically? The list is so long it's comical. Tweet storm needed (due to length of list). nfib.com/content/legal-… [next tweet]
We will start with "Occupational Exemptions"

AB-5 exempts the following industries:

Doctors, surgeons, dentists, podiatrists, psychologists, or veterinarians performing professional or medical services provided to or by a health care entity;
Lawyers, insurance brokers...
...architects, engineers, private investigators, or accountants; Securities brokers/dealers or investment advisers and their agents and representatives that are registered with the Securities and Exchange Commission, the Financial Industry Regulatory Authority or the State of ...
Read 12 tweets
Bill Gurley Profile picture
8 Jul
On 4/12 I tweeted regarding my disfavor for large public companies negotiating bailouts directly with our government without putting the government dollars above other shareholders. For me, this damages the way public markets work - "too big to fail."
I've since been asked whether any of our portfolio had applied for the PPP - the implication being if they had, that I'd been caught in an intellectual trap/inconsistency.
For the vast majority of our investments, we encouraged them NOT to apply. For a handful, say 5%, whose businesses were devastated by COVID/SIP, we supported them in their efforts to avoid laying off even another 5-10 people – the exact intent of the potentially forgivable loan.
Read 5 tweets

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