Brad Gerstner: belief

Transcript context

…And they just don't want to mess it up. At that point, it's their baby. Why on earth would they do anything about the standard? Right. Again, I think Holman, Morgan Stanley, my friend Bill Gurley, and I have slightly different religions on this. At the end of the day, this is really about pricing. If we price these things efficiently, in any three of these doors, then they can be great outcomes for the company. If you have a bad sponsor, if you have a bad bank in an IPO and it goes poorly, then that's a busted process. If you have a bad sponsor, a SPAC, and you shouldn't be public, that's just a busted process. If you tried to direct list a company and you have a reference pricing round that's too high for where the business at, it's going to be a busted process. We spend a lot of time. I hired Chris Conforti out of Goldman. He ran to the equity syndicate desk at Goldman. He was the one selling all the IPOs for Goldman for a really long time. What we said we want to do is just as a value add for all the private companies that we talk to, that we look at, is to really be able to give them the inside scoop. We're not a bank, but we'll tell you all the dirty secrets about a traditional IPO, a direct list, or a SPAC. You can't have credibility telling those secrets unless you've lived them, which we have in each of those doors. Now we can offer what I think is the best insights to these founders. We have no economic finger in the scale because I can partner with you. If you want to do a traditional IPO? Great. We can anchor it or just participate. Direct list? We can anchor it or participate. You want to partner with us and we'll build the book for you? Great. We'll do a SPAC. There are different prototypes, different archetypes for which each of those fit. I think among the folks who are doing this, we probably might be first among equals in terms of our insights into how to get public. That's the old Mungerism, right? You show me the incentive and I'll show you the outcome. In this case, you coming from the perspective of, hey, you realize when the banks are trying to sell an IPO, they come to me to buy the IPO. So having sat on that side of the table and not yet having an incentive, I can talk to you about how this would get marketed to me so you at least have that transparency. Then I can tell you how I want to play in that process, and you can give me feedback, and tell me where I belong in your process.…

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