Can a global IPO be a better alternative to a Series D round?

If I am a series C company and I'm doing 50 million, 100 million revenue, do I have potential in the US markets or no? >> The best VCs would say ABC rounds are good, but D is for dead. You don't even want to know what F rounds are for. If you plan correctly as an entrepreneur, you can tap into that global wall of money by being >> What's the biggest lie founders are told about staying private longer? >> one of the biggest lies out there is that >> Everyone, welcome back to 100 million dollar exits. I'm excited to have Jeff on the show with me. Jeff, you and I met maybe 3 years ago over coffee in New York and loved your story and obviously your stories led to a very interesting book, which I think we're going to have some interesting conversations around the the global front. But for those who don't know Jeff, Jeff, you have raised and transacted over 100 million on your own companies and you've invested over 100 million through your fund into other companies and you've structured and or have led deals in over 500 million dollars in transactions. So, Jeff, welcome to the show. >> Thank you for having me. Good to see you. >> I'm excited to have this conversation. I think it's long coming. You know, first thing I would just kind of go into, we both agree that the venture ecosystem is broken and in variety of different ways, but I'd love for you to kind of give our audience your take on why the VC system is is broken. >> Sure. Well, when I when I started my career as an as an entrepreneur, the best VCs would say ABC rounds are good, but D is for dead. Like you don't even want to know what F rounds are for. Like it was expected that you would go public after after the C round. And and that worked because it meant that high potential companies could access sort of the unlimited deep capital pools of the public market and they could have get the credibility uh and flexibility associated with being public. Uh and uh you know, it worked. My My first company, we merged with another company called Proxy Comm. We bought a third company called Ibis. We went public. And we became a unicorn in the public market. Which you could do back then. Um uh my my second company, Mimio, um we were we were shooting to to go public. We were getting ready and the bubble popped and and more important, there was a structural shift in the US public markets. And that company is still private today. And we do 10 15 million dollars a month, but that's too small to go public in in in the US. Um so, uh what we've what we've became fascinated with is, you know, how do you use the public markets as a tool to fuel innovation and spent the better part of uh the the last 10 years really getting to understand how how the markets are again shifting and how you will again be able to go public earlier in your life cycle. >> So, let's talk about this. Like, companies are just raising obscene amounts of money, staying private for as long as possible. Secondaries have gotten bigger uh chunk of the market. They're rapidly growing. You know, when does this when does this bubble pop? Or, you know, like the secondary you know, the secondary markets or like what what what's kind of your take on these companies getting to close to a trillion dollars in value and still staying private? >> Well, I think I think the you know, the secondary markets are a a permanent fixture of of the capital markets and I do think there is a role for them. Um but what you lose with with secondary transactions is you're not actually funding the business. Uh you're funding an exit of an existing investor. Um the the second thing is you're not providing transparency to the market so that the capitalist system can properly allocate resources. So, that means that you know, pensions are being misallocated, The being destroyed from a lack of of of transparency. So, yeah, I'm a big fan of the public markets because the more people looking uh and uh at the capital markets, the better the decisions that are being made. Uh and quite frankly, it's a it's a mechanism for economic mobility. You know, anyone can can participate. And as uh um uh as Peter Lynch pointed out, you know, at the small end of the market, the smaller cap companies, a sort of a a a regular person on the street can get an edge on on uh the big institutions because it's a small enough transaction that the big institutions don't pay as much attention to it. So, it's really it's a wonderful, wonderful thing to have a big participatory capital market and uh we're we're fans of it. >> And it's shifted though, so so much as you were kind of addressing earlier, like what was possible to go public years ago, becoming a unicorn in the public markets now is just that's you know, maybe a decacorn you could become in the public markets. Uh the the small level, which is kind of crazy to think about. Um you know, kind of looking back in your history of you know, building and selling companies and now kind of in the investor seat, like what have you seen kind of shift and transition, you know, over the years on that front? >> Well, the big I think the big transition is the US has become a mega cap market. You know, you you you do really need to be a decacorn at least if you're a US company, you need to be a decacorn for it to make sense. Um there there were some structural changes. Things like decimalization meant that there was less incentive to to promote volume. Uh things like Sarbanes-Oxley increased the regulatory cost and the and the risk of litigation. You know, one in five uh US companies get sued. Um you know, that's no fun as as a public company. Um but what what's happened is the markets have become really global. And um you know, back in the in the '80s and '90s, you had the Legg Masons and you had the this large sort of high net worth um channel of uh regional brokers that supported IPOs. Well, that's actually gone global. You have you know, massive amounts of wealth coming online in in um in especially in emerging markets, you know, every 7 days paychecks show up in places like Colombia and Indonesia. That money needs a place to invest. And it's not necessarily the individuals. It's it's their pensions. It's their investment accounts. It's their index funds. So, it's just a giant wall of money looking for high-quality uh growth companies to invest in. And if you plan correctly as an entrepreneur, you can tap into that global wall of money by being a global company. And that's and that's that's really been our focus is you know, how do you make sure you're building a a global company that has access to global capital. >> Let's help the audience kind of understand this a little bit more. Like there's this concept of going public. You kind of mentioned some of the friction points happening in the US. But like what is the barrier to entry? Like what are the numbers? Like if I'm you know, series C company and I'm doing you know, 10, 20 million, 50 million, 100 million in revenue, like am I target am I do I have potential in the US markets or not? Like what what's kind of the barrier to entry for like the US and how does that create an opportunity for going abroad? >> Yeah, well, I think I think first and foremost, have a great company that's growing quickly and and yeah, has a solid business model and solid unit economics. Yeah, I think that's the the most important element. I think that that the second element is you you need to think about size appropriateness. Um you know, in in in the US, you really you do need to be large to to list in the US as a US company, but for a non-US company, you you have a different path. So, instead of an S-1, you you essentially file an F-1. You're a foreign issuer, and the barrier there is much lower. And those those smaller companies in the US that are not US companies have done very well in aggregate. Um so, I would say it depends on, you know, where you're domiciled and where you're uh what exchange you choose to list in. And I I think that um we're s- as entrepreneurs and as investors and as a society, we still think of the exchange as a spot. You know, over the last 400 years uh for most of our history of exchanges, you went to a city. You know, there used to be a Manchester exchange. Used to be a a Cincinnati exchange. And and starting with with the Nasdaq in the in the 2000s with the internet, um the exchanges really ceased to be a a spot. They really were a clap It's a cloud of capital. And you know, as an entrepreneur, we think about our stack. We think like, "Oh, where are our servers? Where's our intellectual property? Where's our incorporation? Where's our development team?" And they may be spread all over the place. Well, capital is the same way. You know, you you where you're listed and where your investors are um need not be in the same jurisdiction as where you happen to have your headquarters. It's really just a giant It's a giant cloud, and when you think globally, you can choose in the same way that you may choose to have some of your intellectual property in Ireland. >> So, walk us through an example. Like, help explain like from one company that you've worked on or been, you know, working with on kind of, you know, let's look at the US market. It's not the right fit. Why it wasn't a fit, and kind of why they end up going, you know, global. Can you give us an example? >> Sure. You know, I think I think a good example um a good example is Spire Global. You know, it's a it's a it was at the time we invested was the fourth largest fleet of micro satellites. Um and they had operations in in Scotland, they had operations in Lexing- in in um in in the US, they had operations in Singapore. And their their fleet of of satellites literally circled the world. They were a truly a a global company. And they ended up they ended up listing in the US. Um but they looked at listing in Asia, they looked at listing in London, and they talked to investors from all over the world so that when they listed, they did have a a global base of investors, which helped them build a more resilient company. They actually bought a Canadian company as as part of their growth strategy. >> So, how did they kind of come to that conclusion? They talked to all these investors like and how and how can I educate the audience here? I'm like who are these investors that prefer the London Stock Exchange or why would they choose to invest in companies that are going to go public in London Stock Exchange versus maybe the uh in Amsterdam or Singapore these other kind of global markets? Like what kind of has this capital focus of those markets versus where as Americans we're like, why would you just invest in the US? Like >> Well, you know, I'll give I'll give you an example. There's a a multi-billion dollar asset manager out of Boston. Uh and I'm I'm here in New York. Uh if I if I had a New York company and I was, you know, anything short of a 30 billion-dollar company, it'd be too small for them to look at. But you take that same comp- that same asset manager and all of a sudden you're talking to the domain specialist out of Singapore, or you're talking to the European specialist out of London. You know, you you you get access to the investor that wouldn't even give you the time of day as a US listing. So, I think that's that's part of it is when you're global, it's a different door you go in to talk to to to the asset managers. The second thing is that, you know, a lot of the US funds have just gotten so big, they can't look at small listings. So, you you you you you want to uh Yeah, so let me just lay out the map. If you're doing a $100 million issuance, uh someone investing doesn't want to own the whole thing themselves because they'll not have no one to sell it to. They want to see that there are other people at the table. And they need you write a check for it to make a difference to their fund. So, I doing an IPO where you're only raising 100 or 200 million, you're excluding a huge number of large US funds. However, if you're talking to institutions from all over the world, all of a sudden, yeah, they can get a smaller piece of that, and that smaller piece actually makes a difference to their performance, to their bonus. So, so we're big advocates of you when you go public, make sure you're involving investors and bankers from all over the world to build a big global investor base. Not just in IPO, but as you as you as you think about going public, start to build those relationships. >> And >> >> what does that timeline look like? So, let's just say the company checks the boxes of, you know, looking good, good economics, like has potential for an IPO story. You know, when when does the process actually start? >> Yeah, that's a that's a great question cuz I don't think you ever want it to be a rushed process. Um yeah, some of these markets you can go public in in 16 weeks. Uh that doesn't mean you should. Right? So so I think, you know, what we do when we invest, we we think um uh what can we do now at the point of investment so that 2 years from now, 4 years from now, this company is in a better position to to to go public. Uh part of that is as often when we invest, we'll show uh we'll show the investment to some public market investors and say, "What do you think of this? Like, are you excited when this comes to market?" Uh and I think uh helping management teams build relationships with public market investors before the IPO is is a great way to build a resilient business. Yeah, I was talking to the head of the uh uh one one of the senior executives at the Dubai Exchange and uh she pointed out, she goes, "You know, people confuse uh an IPO with being public in the same way that you could confuse could confuse a wedding party for a marriage." And I said, "Well, you know, what do you mean?" She says, "Well, you would you would never You might have a great wedding party, but that doesn't mean you have a great marriage." And and you know, an IPO is one date in the growth of your company. It's it you really want to be like a marriage, you want to be building a relationship before the wedding party, and you want to be maintaining and expanding that relationship after the wedding. And I and I think that the key is for founders who want to move into the public market to be thinking of it as a long-term relationship with deep pools of evergreen capital, not a funding round or a transaction. I mean, you don't you don't go public because it's easy to do an IPO. You go public cuz it's easy to have access to follow-on capital if and when you need it. It's the flexibility, it's the credibility, it's the higher profile that you get being public. It's a strategic move for the company, not a funding round. And it's certainly not an egg you know, it's certainly not an exit. Right? It's it's a road in building a great great company. It might be an exit for some of your investors, but if you're a founder who wants to build something important, you know, I mean Larry I'm sure Larry Ellison could have sold his company to IBM and I I'm sure he would not have been happy as a mid-level manager um at IBM. But you know, if it it if if that's your dream as a founder to be a mid-level manager at IBM, then you shouldn't be planning to you know, or thinking about whether going public can can help you build a better company. >> Well, let's talk about that. Let's talk about post exit. All right, sorry, not post post IPO. Um let's talk about some of the benefits like and and maybe juxtapose that to company saying private. So it's like there's a lot of benefits going public. There's also a lot of you know, cons in terms of costs and you know, the process and just you know, having to kind of have everything in order, but there's also a lot of benefits that unlock. So kind of give us the benefits of post IPO and all the perks that come with that to kind of help fuel the growth and take the company to the next level. >> Yeah, I I mean the to me the two biggest ones are uh uh access to talent. You know, you have more tools in your toolbox to incent uh and retain and attract talent. You have a um a uh you have a higher profile which can also help in in attracting talent. Um but probably you know, even more important in some businesses is um revenue. Right? There there is a class of of customer especially institution that may not know you as a private company, may not know you exist as a private company. Um and by by going public all of a sudden you're on the global stage. Yeah, good example um uh is Raspberry Pi. You know, I was talking to the to the team there and they said once they went public there was a new set of customers who started showing up because they didn't realize the full scope of what their products could do. And as a private company, they just weren't paying attention to it and they they were worried it was, you know, going to disappear. Uh, uh, but as a public company, they could look at it and say, "Wow, look at these products. Look at this financial stability. This is a company we should be doing business with." And as I like to say, you know, revenue solves all problems. So, if if a if a higher profile and more credibility um is going to help you with revenue, then then it might be something to consider. Uh, another thing is the the currency. You know, we had um uh, we had when we were my second company, um, we had a complex capital structure. And we had we saw an an acquisition opportunity. It's about a $40 million acquisition. Well, the the selling party, they had a complex capital structure, too. And we couldn't come to an agreement. It was about a $40 million transaction. Couldn't come to an agreement. Someone else came in, paid all cash, and uh a couple years later sold that for about $900 million. Um, had we had a a public currency where we could have given stock that they could value and sell, that transaction would have occurred. Or we could have used that uh to to raise more money very quickly and done the transaction in cash. So, so that flexibility in structuring acquisitions both using equity and and raising capital very quickly um it it can be powerful. Uh, it like we saw with with Cisco, the the network company, they were, you know, they were famous for growing very quickly through using their their stock to acquire uh uh accretive transactions and grow their business. >> And so that kind of post acquisition or sorry post IPO being able to get access to more liquid capital, being able to be more liquid to attract capital or attract talent and you know, be a much higher profile. And when we talk to founders about selling their company if they want to sell you know, selling to a public company has a lot more appeal because you know, having your stock locked up into a private company of no idea, no control, you know, no idea what's going to actually happen where if you sell your company for stock into a public company at least have the ability to to exit. Uh and public equity. >> Yeah. No, it's it's selling to a selling to a private company um you know, sometimes it works great. I have I you know, I had a friend who's done very well selling his company and then when they sold again 8 years later did really well second time. You know, two two bites of the apple. But I have a another friend you know, he's he's sold his company to to private equity and uh you know, then all of a sudden they had a new board member who got paid a million dollars a year and they had an outside consultant who was paid a million dollars a year and you know, here here he'd been you know, living on uh uh living on ramen for a decade and uh you know, he got to he got to see uh uh a level of frugality that was not in line with his values and uh you know, they didn't didn't uh didn't grow the way he had hoped. So you know, I think I think you know, you want to as a founder say, you know, where do you want to take your business? And a lot of times going public can give you more optionality and more control in where you take it. >> Real quick, if you're a founder doing over 5 million in revenue and want to know what the best $100 million plus founders are doing to fuel their growth, then make sure to subscribe to our $100 million exits newsletter, get the playbooks that are proven on how to fund, grow, and sell your business. I'll even give you a curated list of investors that want to invest in your business. It's totally free. All you have to do is click that link down below, subscribe, do it now. I promise it's worth it. You won't regret it. You got nothing to lose. Go ahead, subscribe now. Back to the show. >> And so, when our founders ask "Meaningful scale?" And they're seeing their the their peers, or maybe not their peers, but like these massive companies up in the A's, SpaceX, Anduril, Anthropic, uh yeah, all the big names that are trading fluidly in the open market. It's on the secondary side, but not necessarily public. When they look at that as maybe their playbook, maybe that's like, "Oh, well, we should do that." What's kind of your advice for those those companies that are maybe considering the stay private longer model versus the uh what seems to be a very positive opportunity entering uh an IPO. >> Well, I I think it really depends on the specifics of of your situation. Um you know, in the in the types of investors you currently have and the types of investors you want to attract. Um look, I it you know uh I I would say first and foremost, have a great business that everyone's everyone wants to throw money at. Um but, you know, I I I offer the cautionary tale of uh Intel. You know, Intel was one of the big high flyers. It It did very, very well. Um at one point, it was one of the three, you know, most valuable, most important tech companies. And um they went public uh as a memory chip company. And they had to pivot to CPUs. Now, as a private company with venture capitalists, a lot of times when you realize your business model has changed and you need to pivot, the VCs are on to the next fund and they're like, "Oh, well, we you know, I guess we missed that one. We'll move on." So, so then you don't have the support of your VCs, which has signaling risk to other VCs. And you know, I I'm willing to bet that had Intel been private when they realized they need to transition from memory to CPU, they would have gone out of business. But instead, they were public. The investors who didn't believe in memory left the cap table. They were able to raise new money, um and uh attract investors who saw the vision of of CPUs, and they went on to become one of the most important tech companies for well over a decade. >> Intel inside, still remember it. Now, we're having to do a whole other pivot now, and they just, you know, after all these years and Nvidia absolutely destroying them, they're like, "Oh, we've got to got to turn turn things around here." Uh so, we'll see how that one goes, but um and and just generally, like when you look at the secondary markets and you see this rapid rise of lack of transparency and SPV with an SPV with SPVs, three times stacked fees, as a founder, like is there a reason to be concerned seeing those types of transactions and like and also from an investor perspective, you know, trying to get into these top, you know, top names? >> Well, I I think one of the the thing that worries me is um I see some There's a class of investors who uh want to have the name on their uh you know, on their resume. I'm um so, they're you know, they're buying a certain name to be able to say that they own a certain name, you know, whether it's at the country club or uh you know, on their resume. And when you have that type of buyer in the mix, um you know, they're price insensitive. So, I don't like buying things where I'm competing with people who are price insensitive. The The second thing that that worries me about the secondaries is you have um you you have investors who at the manager level are incentivized to show that they made a good trade. So, you know, they can say, "Oh, well, you know, we we paid uh uh you know, we paid 140 billion, but the last the last investment was at 200 billion. Therefore, you know, we've made all this money even though we just bought it at that price, you know, 3 months ago." So, so and then their bonus is based off that. So, so you have a you have a disconnect when you're investing someone else's money in the secondary market because of the lack of transparency. The other The other thing with the secondary market, I mean, the the the volume really is concentrated at the at the biggest names. You know, it used to be the the top five names, then it was the top 20, but it's it's still a relatively small number of of of names where the secondary most of the secondary transaction is occurring. But one of the things that concerns me is you you a lot of times don't have stock in the SPV. You actually have a promise or you have another SPV where where someone has promised to commit shares. Well, those shares are subject to a rofer. Uh and you know, you you you multiple jurisdictions. You're not really sure who who's pledged the shares in some cases. And I've seen very sophisticated investors say, "Oh, well, you know, we've got we we've we've got these shares." And and and I go, "Well, you don't you don't actually have those shares. You have a piece of an SPV which has a piece of another SPV which has a pledge of shares which you're hoping Uh and so it worries me when I ask them what class they have and they they can't answer. >> Yeah, I I see it all the time and I always just kind of question the mechanics. Like, "You have access to primary shares that are preferred and you know, you have all this uh you've got the fight to be at the cap table, that's one thing. But then playing the secondary game where you're playing one of many SPVs, you have no real authority, you have no rights, you have no information rights, and you're just kind of like, well, I hope they don't screw it up. Uh and I hope I hope that whoever promised or pledged the shares actually ends up delivering on their promise when the time comes. >> Yeah, but just to be clear, I do love secondary shares. Like if I'm a primary investor in a company and I am on the board and I have, you know, information rights and I really know the cap table and I know everything that's going on, it's a great opportunity to buy secondary shares because you actually you do know exactly what you're getting. Um I I'm just skeptical of people who are buying secondary shares and have no information rights and you know, ask the question of do you have the series C or the series H? And they don't know the answer. You say, oh, well, how was last quarter? And they say, well, I don't know. Like I don't I wouldn't want to own a security like that. You're you're essentially underwriting uh who's hyping it and what's the hype, not the financial performance and cash flow of the underlying business. >> Well, hype is the name of the game. And as we kind of go back to kind of the VC market, you know, obviously Carta published their annual report for 2025 and they always kind of provide some interesting reports. Like the recent data is close to about half of all venture capital is going into like primary AI investments. And you know, it was pretty much most of it all kind of concentrated into fewer companies and fewer rounds. And as we kind of see this proliferation of companies staying private longer, I'd be curious to get you you've already kind of touched on it in terms like the incentive metrics for these VCs or effectively who employees that are managing other people's money. Um what is kind of the concerns that might be there for that type of incentive structure and consolidation of capital? >> Well, I think I think uh I'm going to take a little bit of a contrarian view here. Um I think people are excited about AI and they're investing in AI companies. um I'm really excited about AI because of its impact on every other sector. I mean, you know, drug discovery in pharmaceutical, it's going to have a huge impact. You know, health care delivery costs, it's going to have a huge impact. Um you know, you transportation, material science, manufacturing, uh it's going to have a huge impact. So, so I think that um the amount of capital uh that that's going to change hands as these industries get restructured um is massive and a public market is better able to to to fund that. In the same way that the railroads, I mean, a lot of the a lot of the growth of the capital markets and the public markets in the US uh was because they needed to fund railroads. It was such a big big national expense. Um uh and um uh I think that we're going to have a huge expense as we retool uh our our pretty much the entire economy. Um so I think uh so I don't know if that answers your question, but that's one one element that we've been thinking a lot about. This the second thing is um you know, I I was a big fan of AltaVista. Uh you know, and and uh you know, I and I used you know, I used excite and you know, I remember Yahoo and and I remember Friendster. Um and I think and MySpace and I think that uh when I see something like you know, deep seek come out of relatively nowhere or open claw do amazing things uh or open router where I'm using, you know, a dozen APIs depending on what's appropriate for what I want to accomplish with AI, um or paperclip to to orchestrate and spin up agents, I like I think we're still very early. Um and you know, I'm glad that there are lots of capitalists funding lots of different parts of of the ecosystem, um but I think it's it's way too early to call the winners. >> That's right. Um you know, and I think that's why we're seeing consolidation of capital. But I guess when it comes to this um Well, let's switch to let's switch gears here. Like, what I think would be interesting to for the audience to understand is why did you start this fund with GPO? And kind of what's this ultimate strategy of how you guys go about kind of backing these companies pre >> Yeah, to put them on this journey for like a global IPO. >> Yeah. Well, look look, at at at the end of the day I'm an entrepreneur at heart and and a founder and like most founders or many founders, you know, I we saw a problem and we're like, we need you know, we need to start a company to solve that problem. It just so happened that the right type of company was an asset management company, a venture capital fund. And and really what we saw was two two uh reasons that we we felt compelled to to start the GPO fund. One was we were doing business all over the world and um the the what we kept finding was venture capitalists who would say things like you know, why are you worried about Asia uh when you don't have a sales rep yet in Ohio? Or how many customers could there be in Europe? You don't even have a sales person in in uh Maryland yet. And and I think what what we were seeing is that you know, most of the world is not the US. Most of the customers are not in the US and most of the investors are not in the US. So, what we we wanted to be a venture capitalist that backed founders that wanted to build something global. Um and and and felt there was an opportunity where we could add value and help accelerate that through our experience uh having started companies in in and operated companies in in lots of different countries. The the second element you know, when you is what we discovered or what we what we soon realized was that when you have operations in multiple countries and when you have customers in multiple countries uh there's another element which is having investors in multiple countries. And and you know, we I found first hand as as CEO that when you have investors in other parts of the world, they help you. You know, they're they're reading different newspapers. They have different social networks. And they walk you into opportunities or keep you out of trouble uh uh keep you away from from uh uh bad opportunities um simply through through a phone call and regular regular communication. So, I think as a founder of course you need to be thinking about how do you get great talent. Uh uh and and where in the world is the right place to get them. Of course you think about how to tailor your product uh and systems and processes to accommodate international. But also how do you make sure you have a global investor base so you're getting a a good feedback loop and have a competitive advantage doing business in these countries. And when you do that, it means you're laying the foundation for a company that when it goes public, it can be a global public company and attract investors from all over the world. >> And you know, as a founder, you know, basically solving this problem because it's it's essentially like a go-to-market solution. You know, it's not just about as you kind of said, it's like the the exit. This is very much the continuation plan with creating more options. And if you are a you know, to put yourself in the shoes of a founder who is considering a series D versus maybe this path like what what questions should they be asking themselves and what should they be kind of thinking about before they you know sign a term sheet? >> Yeah. Well, I think I think one of the one of the things is uh you know, what's their vision? You know, where do they want to Where do they want to be? Um and I and I think also a big question is you know, what are you signing up for? Right? Because the business model of a lot of series D and E investors is keep it private for a while and you know, make money on uh secondary SPVs. Um so you know, is that aligned with your vision of where you want to take the company and and do you have the flexibility that that you need? Um I mean, there's some great uh series D investors out there that that add a lot of value. Um but at the end of the day, I think it's it comes down to the founder's vision. I think for us to have a little bit more of a conversation on this like, you know, when you think about the incentive structure of I guess maybe could put us in the the shoes of the investors on either side. Like, why does a series D investor want to keep it private? What's kind of their incentive? You know, as Charlie Munger shows like show me the incentive and I'll show you reward. Is that what it was? No, what was the exact quote? The outcome, that's what it was. Um and then like, what's the incentive of you know, the public markets and you know, selling to retail or selling to you know, these institutional uh groups that can you know, kind of fund the the IPO. If I'm the founder kind of weighing these options, I want to kind of know what's in their heads and what's their incentive structures. >> Yeah. Well, I think I think the the um uh there are um investors whose business model is to put as much money to work as possible. Um so, you know, that that may not be what's right at that point in time for the business. Um or it might be. Right? Um so, what I mean by that is you know, you have you have um I think a group of VCs who are all about the alpha, you know, how how much can the amount they put in grow, and then you have a group that says, you know, how much money What matters is how much money we put to work. Well, that's a very different alignment than the founder. You know, the the founder is about creating value um, for for their equity uh, and and following their vision. So, I I think you just have to be sensitive to that. I also uh, I also think that um, flexibility matters. You know, we we've had deals where uh, uh, as an entrepreneur, you know, we had some investors uh, needed to show cash return to their investors and they were, you know, they they just wanted to do anything that got them cash. While we had other investors who also had a board seat who who, you know, just wanted to put more money to work, right? Now, you now you you you'd you'd think that they could solve that amongst themselves, but all of a sudden as as a founder, that becomes your problem. Um, whereas as a public company, you have you so many potential investors that you that you can turn to um, uh, depending on where you where you plan to take the company and how good you are at communicating that vision. >> Well, I think also, and correct me if I'm naive here, but you know, one of the big glaring issues of or opportunities they have going public is eliminating the pref stack, you know, for for companies and kind of cleaning up the cap table. And if you don't like an investor, it's easier to get them out. Like, well, well, kind of walk us through whether that's a correct assumption or or not or kind of like how that works where if you have like a 100, 200, 400 million-dollar pref stack, how does that impact going public and or the post-public uh, outcome? >> Yeah, no, that's that's that's a a particularly important and I think well understood by repeat entrepreneurs, but maybe not so much by first-time entrepreneurs. So, um and I'll I'll do a little history back here with with with Facebook. Uh you know, Facebook uh at one point raised money from Microsoft at over a billion dollar valuation. And everyone's like, "Oh my gosh, this is this is this is ridiculous." Um at the time in the and and at their size at that point. And and what what they really had done is they had unlocked this new state of venture, which is you know, you you tell me the valuation entrepreneur, and I'll tell you the terms. Meaning that they, you know, increased preference, increased dividends, you know, um increased certainty that you're going to see a return. So so that that preference um gets paid before the entrepreneur and before the employees and before the the earliest in in investors. Uh National Venture Capital Association standard documents has everything convert to common as part of of the IPO. Which means that if you are uh uh let's say your company's worth $10 billion, uh and you've got uh and you've got $11 billion of of preference, but you own 20% of the company, that $11 million billion dollars of preference disappears at the IPO, and you now own 20% of the company. Less whatever you raise at the IPO. So so it just it just aligns everyone cuz they're all in the same class of stock. >> Speaking of class of stock, when you hear kind of these founder share concepts for like the Elon Musks, the uh Sergey and uh Larry um you know, type deal structures, how does it actually work with a public market? When you have kind of different asset, you know, two different classes of stock in the public market? >> Great question. So uh I got to interview in writing Global IPO the great rewiring of public markets, I got to interview a lot of public market investors. And some public market investors hate it. That the founders have have super voting or preferred voting. And you know, I as an investor, actually I love it, right? Because a lot of times your biggest risk is not what management's going to do, it's what the other investors are going to do. You don't want an investor coming in and all of a sudden say, "Oh, we're going to you know, we're going to take this gem of a company with huge upside and we're going to you know, run it for cash or we're going to shut it down cuz it competes with another company in our portfolio." So so I I'm a big fan and actually we've done some we've done some research where we looked at founder-led companies versus non-founder-led companies and had a a rigorous scoring methodology and what we found is that in technology founder-led companies outperformed. So you know, the data the data supports this. That said, about half of all capital is passive. So you've got indexes who are forced to own these companies that are governed in a way that they have no no say over. You know, I I think I think founder shares work when you have a market of of active participants where they can choose and say, you know, do do I do I want to back this this founder? Do I want to back this company? In a world of indexes, you know, you're guess what? You're you're being passive, you're kind of stuck with with what you're being handed. Um So I don't know if that answers your question. I think it was a big reason why Wise Wise moved from London to the US was that their founder shares status was going to expire in London. Um and the US is more flexible on on founder shares. >> Are you saying the UK is not founder-friendly? >> I'm saying that the my understanding of the structure is that founder shares expire. Um and um yeah, whether that's good or bad, my view is you know, the world is the way it is. You you you when you you go to where the markets support capitalism. >> Well, fair is fair. So, as we think about the public markets and the international markets in particular, like this is, you know, something that you kind of become an expert on. You've done all the homework and research on these types of markets. Are there certain types of companies that will perform better in Let's Let's eliminate the US as a choice. So, like if the US is not the right choice for a company for whatever reason, like what are some of the better markets that are exchanges that would be better for different types of companies to list in? >> Great Great question. Look, there are there are 18 top 20 markets that are not in the US. Um you know, that's just math. And and the those markets are increasingly interconnected. So, you you've got uh you know, AI and APIs are making it really much easier for the systems that process trades to talk to each other. Um So, so, you know, you some degree you can think of it as a giant market. Um but but when you ask about these other 18 markets, uh I'm you know, I generally invest in companies that you you know, they're based on common law. Um and it's what I'm personally most comfortable with. So, yeah, that's that's the UK, that's that's uh Australia, that's Canada, that's that's Hong Kong, that's Singapore. Um you know, those those are markets that that uh I have a a a bias towards. That That said, there could be lots of reasons to to list in Europe. There's lots of reasons to miss list in the Middle East. Um uh Japan and and India are very interesting and constantly changing. So, what what I would say is uh you should look at the strategy and footprint um and direction of the company itself. Look at the investors it it has and expects to attract, and then look at the state of exchanges at the point when you think you're going to go public down the road, because the landscape is market is is changing. You know, there used to be a San Francisco exchange. Used to be a Leeds and Edinburgh exchange. I maybe there still is an Edinburgh exchange, but but the but the point is is that that that that the capital markets are constantly changing. And you know, we no longer live in the world where it's just Amsterdam and London. >> No, that's fair. And what will be uh your parting advice for founders that are basically seeking the public markets as a growth strategy? Um what will be your final parting advice for them? >> Um oh, is that is that a softball question? I I would recommend my book as a great place to provide a framework to to to think about it. Um one thing we we uh uh w- one thing that's really important is understanding the unit economics and how you define your unit, whether it be a store or a country or a widget or a lifetime value of a relationship, that unit is is how the public market is going to understand your business. And if you if you can't articulate that and the story around that, then then it's the public market's going to be very unforgiving. Um so I would I would recommend that that founders and management teams um really put some thought behind their how they define, how they track, and what they expect to see in in their uh in their unit economics. Um yeah, and they should they should have that buttoned up well before moving into the public market. >> Awesome. Jeff, what would be the best way for people to learn more about you or buy the book or reach out to you if they have questions? >> Yeah. Well um well, we're uh you know, Link- LinkedIn is probably the best. Uh I've been using the same Twitter handle Urgency Speed for uh quite a while, so that's a that's another good way. Uh our website is gpo.com. Uh so it's you know, it's we're not hiding. Um and love to love to hear from high-potential, high-growth ce- uh founders. >> Amazing. Well, Jeff, it's been a pleasure having you on the show, sharing your insights, and helping kind of expose what the other options are for for founders out there that are building real high-growth companies that might want to consider the alternative to staying private for longer. Uh so thanks for coming on and sharing your insights. >> My pleasure. Thanks for having me. >> If you were inspired by today's episode, then go ahead watch this next episode. Promise it's worth it. And if you really enjoyed this last episode and you want to connect with the guest I had on today, make sure to leave a comment down below telling me why you would like an intro to this guest and I'll make it happen.