00:00If we didn't have the tensions in Iran are we still likely to be quiet on the IPO front until
00:05we have the juggernaut come into the market. How much are you anticipating SpaceX. Yeah I think things would be
00:11slow until the big ones go out. And we talk about SpaceX a lot obviously you all have spent a
00:17lot of time on that subject. But I think you can add into that mix open AI and anthropic potentially
00:22a data breaks. I think that's really what the market catalyst will be for the IPOs going forward. So funny
00:28because we had Ali Godsey on the show last
00:29week and he pushes back. He doesn't want the money doesn't particularly want to be publicly performing at this moment.
00:36He likes being a private company. He's got a wash with money coming from the private side. Why do some
00:41of these giants need to be going into the public market. Why the catalyst. I mean I think if you
00:46just think about the capital intensity of some of these businesses maybe set data bricks aside for a second. But
00:51you think about SpaceX open AI and anthropic the capital consumption that these businesses are going through really necessitates tapping
00:59into a
00:59bigger pool of capital that you can't really get access to on the private side. So I do think it's
01:04not if it's when for those companies for sure. Matt I have a series of mechanical questions for you if
01:10that's OK. Whether rightly or wrongly I've been thinking about a lot of late. So if you take all these
01:16names that we've mentioned SpaceX anthropic open AI data bricks they have a lot of investors in common across their
01:23cap tables. Does that make things complicated when it comes to who will or won't IPO first.
01:29And in which order. I'm not really sure that it impacts the order or timing of the IPOs. And I
01:36think the reason why you have some name overlap in the investor set for those names is simply due to
01:43the fact that those three companies have raised a tremendous amount of money. So it's less a reflection of some
01:48market dynamic and more reflection of the fact that when you're raising 10, 20, 50 billion dollars in financing on
01:56the private side there's only a limited pool of investors you can go to.
01:58And then similarly you know there are a group of the four big US banks all competing for different parts
02:07of the brief across names that if you go through the news cycle are all preparing to go public in
02:13a similar window. Is that complicated?
02:17Again I don't think that's super complicated. I think that the banks assisting these companies and helping them to list
02:22will figure out ways to solidify their position in those books in order to capitalize on the opportunity.
02:28Because we're really talking about the potential for some of the biggest listings ever coming to market this year.
02:34And that's where Wellington's so interesting. And you know you've been on the Midas list however many years running. You
02:40understand private markets. You also understand as a crossover investor and into the public markets.
02:45How much are you growing some anxiety that these companies are finding that their shares are being marketed in places
02:53they didn't realize that we've done a lot of deep dives on these SPVs that claim to own a lot
02:57of Android or a load of SpaceX and people aren't actually owning what they thought.
03:01How do you how are you telling your friends around a dinner party right now. Yeah no I think it's
03:05a great question obviously sitting inside of Wellington we have the benefit of seeing the full picture of what's going
03:10on in the public market versus what happens in the private market.
03:13And there definitely are instances where these SPVs may come into the private companies and even the companies themselves aren't
03:21sure who's actually buying pieces of their shares.
03:23And I think what an interesting trend has been recently is we have seen the more in demand companies really
03:30clamping down on the number of SPVs and the ability for SPVs to come into their financings because they know
03:37in the private markets they get to choose who goes on their cap table.
03:40They get to decide who they're going to let invest. When they go public anybody can buy their shares.
03:45And so the companies on the private side are really starting to clamp down on who am I comfortable with
03:50coming into my cap table via an SPV.
03:53And this is about FOMO. This is about a retail investor or a more an accredited investor more broadly who
03:59hasn't had access to the whopping markups that they've seen in the private market like Wellington has and doesn't want
04:05to just be left having to buy it in the public market after it's IPO.
04:08Is there enough juice left on the table for these companies once they go public for the share still to
04:12perform.
04:13I definitely think so. I mean if you think about the public market in general perhaps the return expectations in
04:19the private market and public market are different.
04:21But the risk profile is also totally different. And so I believe that if you think about some of the
04:27names coming out and the growth rate of those names the scale of those names and the potential market opportunities
04:32for those names.
04:33I think there's still a lot of return potential ahead which opens the door for even the Wellington public teams
04:39to invest in some of these names ultimately when they go public and generate exciting returns for the clients hopefully.
04:46Matt what's Wellington going to do in the late stage space for the balance of this year like with the
04:51context of all that environment that's going on.
04:54What's the strategy. You know I think there's opportunity to be had in some of the larger names that are
05:01attracting larger dollars and think about some of the bigger financings coming to play.
05:05But I don't think for us at least the right strategy is put all of our chips in that basket
05:10for us on the late stage private side.
05:12We augment the opportunities of some of these larger financings with comparatively smaller yet still late stage businesses because as
05:20great as AI is as great as some of those names we just talked about are you don't have to
05:24be an AI business to go public.
05:26You can be a great consumer business health care business in tech business and go public and you don't need
05:31to be a trillion dollars of market cap.
05:34There are plenty of exciting mid cap names even small cap names in the public market that I know our
05:40public teams would be excited to add to when those names ultimately do enter the public market.
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