Imran Khan
speaker
171 appearances
1 recordings
1 series
first heard Aug 2024
last heard Aug 2024
Imran Khan’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
So the conversation got really heated and I was literally thrown out. A year later, Google went up, I don't know, I forgot, 100% or so, and those guys were fired from BlackRock. But the whole true story is that was the debate, that we didn't know how big the market is and why they're spending so much money on CapEx.
But the reality is the business had a very, very high gross margins and contribution margins were very, very high.
So I think the reason you give revenue margins, and I think revenue multiple, and I think that it's totally fair to look at SaaS business that way, because SaaS business, many of the SaaS business has very high gross margins, and they have a very, very high profit margins at a steady state basis. So you can predict the cash flow based on the contractual revenue.
So unless there's a disruptive software comes out, it makes sense to a revenue multiple. But a delivery company or a consumer company giving revenue multiple doesn't make a lot of sense.
So first of all, staying with the theme, I think it was the right thing for those guys to go public. Because number one, I think if you ask them, they will tell the company became stronger because they were a public company and they adopted their business many way. I don't think the margins that Box and Dropbox is generating, if they could have generated, if they would just stayed private.
Because the growth was slowing, they were forced to look at the business and run the business better. There is absolutely nothing wrong with a business that's growing slower. Probably the market size is small. Not everything is going to be Google and Facebook. That's totally okay.
But if you have a business that is growing slower, relatively steady, I think you should focus on improving your margins, be more cautious on cost, drive more efficiency in the businesses, return capital to the investors. If you are generating profit and you can deploy the capital, you should return capital to the shareholders.
So let's going back, you know, you said Imran, everything you were saying, you're talking about investor perspective, which is true. I will be the first person tell you in your podcast, my loyalty is to my investors who gave me money. I would never give money to an investors who goes out publicly talk about, oh no, we stick with the founders.
No, because your fiduciary responsibility legally is to your investors who gave you money. It's the guy who manage money for firefighters or who manage money for the teachers. They give their pension money to you. Your responsibility is to help them so that their pension is funded.
You going out saying that, oh, I support founders and I don't care about my LPs, that's completely BS and that's not the right thing to do. You are taking money from people who you have responsibility to them. They're counting on you. So I have no problem saying that my responsibility, my loyalty is to my investors. And obviously I want the founders to do well and I will help them.
But at the end of the day, people who give me money, I have fiduciary responsibility to them. So any investor who says that, they are either completely clueless or they're not being honest with themselves. But going back, why it's right for founders to go public. I want to say that, listen, if you have a company that doesn't have any liquidity for their employees, that's not good for the employees.
Yeah. The question is how long it'll last. I think years. And maybe you can do it for years. You know, the thing is that that's a cycle going to go on. But I think over time, I don't think it's a great look when your existing investor marking up that existing deal to give employees the liquidity. I'm surprised that allocators are not asking the hard questions.
The reality is, I actually don't think Stripe needs to go public. But if Stripe is a profitable business and buy back that shareholder's stock or return and buy back employees' stock, that's fine. Like, listen, there's a lot of great companies who are private for a long period of time. Cargill is a private company and does a lot of time. And there's nothing wrong.
If you're a private company and you don't want people's pay, like don't want to deal with public market, I think that's an honorable thing to do if you make your business profitable and pay it back to other people money. but constantly going raising money to give your employee liquidity and to run the business. You know, I hate to say that. That just doesn't feel right.
I am not super fan of Lena Kant and fundamentally believe over-regulation is bad. I think that America became a great country because it empowers entrepreneurship. It empowers small businesses and people do that. At the end of the day, when you give the decision-making or capital allocation for the people who are allocating the capital or running the business,
taking it away from them and giving it to a bunch of people who never built a business, never run a company, but they're more of a bureaucrat, you know, government officials for a long time, only lived in Washington, D.C. I don't think that's a good outcome for the country, and that's not the way the country was meant to be created.
So I fundamentally disagree with overregulations and some of the things that Lina Khan has done and the potential, I think, is flawed. But saying that, I actually don't think the M&A market, I think people has a reason to blame everything. And right now there is, and I look at it on Twitter all the time, they like to blame everything. I think the problem in M&A market is also the same thing.
The seller expectation is too high. When a public company is trading 20 to 30 times earnings multiple, they cannot afford to pay out 50 times revenue multiple to buy a company. And then you don't see private to private mergers because all the valuation is messed up, all the cap table is messed up. So you cannot do that either. So that also play a pretty critical role. I get you, but...
Yeah, but not everything is Figma and Waze. So if you're selling it to Google, if you're selling it to Facebook or selling to Adobe, if you look at the NAS, I think the US public market, I think what, there's 2000 companies over $2 billion market cap. Top 20 companies will have a lot of scrutiny. And honestly, in many cases, it probably makes sense to have high scrutiny on the top 20 companies.
But other 1,980 companies probably not going to have a lot of difficulties acquiring deals. So I think blaming everything to Lina Khan is probably not fair either.
Showing 41–60 of 171 · page 3 of 9
← Previous
Next →