E29: Coinbase goes public, direct listings vs. IPOs, unions & more with Bestie Guestie Brad Gerstner

Brad Gerstner said Grab’s SPAC structure delivered a price 20–30% above what a bank-led IPO would have achieved, implying more than $1 billion of avoided dilution on a $4 billion raise. Nearly one-third of shares could trade on day one, while sponsor shares were locked for three years.

David Sacks said his investment through Ribbit Capital returned 506× when Coinbase went public, and Ribbit distributed his Coinbase shares immediately. The discussion put Ribbit’s Coinbase ownership around 7–8%, showing the extraordinary payoff available to early investors before the direct listing.

Gerstner passed on 21.co in 2014, felt vindicated when Bitcoin plunged from roughly $1,200 to $300, then learned the company’s sale to Coinbase had produced early Coinbase shares. He called the mistake “mental inflexibility”: a short-term correct decision stopped him from reconsidering a long-term thesis.

Chamath Palihapitiya said his own pressure to return money from Social Capital’s early funds pushed him into decisions he now considers suboptimal. His institutional LPs were not demanding liquidity; he concluded that with exceptional winners, the economically superior decision would often have been simply to keep holding.

Gerstner said major public-market growth investors he had just met were uniformly deleveraging after software and internet valuation multiples had already fallen roughly 30–40%. He expected another 10–20% compression and warned that richly valued private rounds would eventually have to reconcile with harsher public-market pricing.

Jason Calacanis relayed an unnamed media executive’s counterintuitive view that unionization initially made payroll easier because negotiated pay scales constrained individual raises. The executive said firing later became harder, managers avoided performance processes, stronger employees left for better pay, and weaker performers accumulated.

Gerstner proposed bypassing Washington with a privately funded $10–15 million pilot giving disadvantaged American newborns $2,000 investment accounts, and Palihapitiya immediately backed it. They believed private donors could scale it toward $100 million, noting that $2,000 compounded at 8% until age 65 approaches $300,000.