David Friedberg

Up until I floated IPO A in 2018, I think it was, the first way was really the only way.

I was involved in two direct listings, Slack and Coinbase.

And in both of those, what I learned is that it has the same vagaries as the traditional IPO.

So in the traditional IPO, you go to a bank, they underwrite you, they act as a gatekeeper, and they take six, seven, 8% fees as a result.

And then they allocate what is essentially underpriced stock to their best customers.

Then you see a one day pop, maybe a two or three day pop.

All of those customers tend to unload and then the stock tends to drift down.

So the IPO is expensive and it typically is mispriced.

The direct listing, you have a different dynamic, which is the first trade is always the highest trade.

And then it just goes straight down.

That happened with Slack and it happened with Coinbase.

Spotify would be in that group as well.

Yeah, with Slack, I remember like I was like offside a billion dollars and I was like, well, I'm never letting this happen again.

And so when I had the Coinbase thing, I sold it the first day and I texted Brian.

I said, this is not a directional indication of your company.

It's the dynamics of the direct listing because I learned it the hard way that the time to sell is on day one.

So where does the SPAC come in?

You know, especially now in version two, version two being the thing that I have been tinkering and refining with and I'm trying to push in this new version.

I think that it's creating an incredibly competitive vehicle where you can have a ton of money, go into these private companies, take them public at a very, very low cost of capital.

And I think that that should be very enticing.