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Yes. Far too many financial instruments seem to be explicitly designed to enable the already-moneyed to skim a cut off of every single operation; and while you

Yes. Far too many financial instruments seem to be explicitly designed to enable the already-moneyed to skim a cut off of every single operation; and while you could have made the argument decades ago that it was a somewhat laborious process, I don't really buy that anymore. Transparency and automation may yet help rid us of rent-seeking behaviour.

toomuchtodo 7y ago
Direct listings don’t cut Investment Banks out; it just changes the fee dynamic. You’re still paying “the middle man”, just for different services. https://www.bloomberg.com/opinion/articles/2019-10-04/how-to-disrupt-the-ipo-pop https://www.bloomberg.com/opinion/articles/2019-10-04/how-to...
- core-questions 7y ago
  Well, not a surprise, of course they're still in the mix somehow.
rchaud 7y ago
How do you automate the investment banks' most important function: underwriting the share issue so the company gets a guaranteed minimum share price? Or the road show for that matter? Does the CEO of Asana have pension funds, mutual funds, PE, HFs, etc in their contacts list? Would they be able to negotiate a better price than the banks that already have a working relationship with these entities?
- core-questions 7y ago
  What process is the bank itself doing right now? Risk analysis in order to determine what makes sense to invest in, and then using its funds. I'm not saying there won't be banks, but perhaps we can stop letting banks be a vector to supply massive quantities of money to biased middlemen who have their own end goals in mind that might actually be larger than the ledger.
- ummonk 7y ago
  >Does the CEO of Asana have pension funds, mutual funds, PE, HFs, etc in their contacts list? He might actually, what with his time at Facebook. But the point of a direct listing is that you aren't negotiating a price - you put the company on the stock market, and let the markets do the negotiating for you.
  - rchaud 7y ago
    If employees are partially compensated in options, it makes sense to negotiate a price that's at or above the strike price so that some of their options can be cashed out at the time of going public. If Asana is profitable and their valuations check out, that would be a scenario where maybe the banks aren't needed. But if they're not, leaving it up the market to decide can be dangerous.
    - ummonk 7y ago
      There are plenty of comparables in the public markets of similar companies (SaaS companies with high growth rates at the expense of profitability), including Smartsheet in particular being in practically the same market. It's pretty easy to estimate the range of valuations at which Asana would trade, and ensure that is well above the employee strike price.

toomuchtodo 7y ago

Direct listings don’t cut Investment Banks out; it just changes the fee dynamic. You’re still paying “the middle man”, just for different services. https://www.bloomberg.com/opinion/articles/2019-10-04/how-to-disrupt-the-ipo-pop https://www.bloomberg.com/opinion/articles/2019-10-04/how-to...

core-questions 7y ago
Well, not a surprise, of course they're still in the mix somehow.

rchaud 7y ago

How do you automate the investment banks' most important function: underwriting the share issue so the company gets a guaranteed minimum share price? Or the road show for that matter? Does the CEO of Asana have pension funds, mutual funds, PE, HFs, etc in their contacts list? Would they be able to negotiate a better price than the banks that already have a working relationship with these entities?

core-questions 7y ago
What process is the bank itself doing right now? Risk analysis in order to determine what makes sense to invest in, and then using its funds. I'm not saying there won't be banks, but perhaps we can stop letting banks be a vector to supply massive quantities of money to biased middlemen who have their own end goals in mind that might actually be larger than the ledger.
ummonk 7y ago
>Does the CEO of Asana have pension funds, mutual funds, PE, HFs, etc in their contacts list? He might actually, what with his time at Facebook. But the point of a direct listing is that you aren't negotiating a price - you put the company on the stock market, and let the markets do the negotiating for you.
- rchaud 7y ago
  If employees are partially compensated in options, it makes sense to negotiate a price that's at or above the strike price so that some of their options can be cashed out at the time of going public. If Asana is profitable and their valuations check out, that would be a scenario where maybe the banks aren't needed. But if they're not, leaving it up the market to decide can be dangerous.
  - ummonk 7y ago
    There are plenty of comparables in the public markets of similar companies (SaaS companies with high growth rates at the expense of profitability), including Smartsheet in particular being in practically the same market. It's pretty easy to estimate the range of valuations at which Asana would trade, and ensure that is well above the employee strike price.