Lise Buyer of Class V Group
Hello and welcome to the Pandocap show - we are kicking off the second half of the year with Lise Buyer Founder and Partner of Class V Group.
Lise, welcome to the Pandocap show!
If you wouldn’t mind, could you share your background with our audience?
I was an institutional investor at the largest tech fund T. Rowe Price. I moved out to California and pursued a career in venture capital but I realized that the VC’s who were good at their craft worked at companies. So I went to work for Google and helped them with the IPO process which was an extremely unique process called a dutch auction. I stayed at Google through the IPO and then left to start an advisor firm called Class V Group. Today Class V Group supports companies through IPO advisory services.
How would you summarize the capital markets activity for the first half of 2020?
The market went crazy in March and then after companies started reporting earnings with no guidance and going into April, May things started picking up dramatically. What’s fascinating is that the economy is not in great shape but the market is acting like happy days are here again. It’s because debt levels and bond interest rates are so low that there is no where else to put your money. Also companies have weathered the storm and investors are not currently paying attention to current environment and looking at 2021 and 2022.
This month we have seen more companies file to go public. What do you think is driving the activity to access the public markets during this volatile time?
The companies that you are seeing file to go public have been working on the process for at least 6 months now. You are seeing the backlog of IPOs because of the pandemic. Then there are also some companies that are encouraged by the strength of the market right now. Some companies have definitely been helped by the pandemic.
Can you share your perspective on non-traditional IPO approaches like direct listings or SPACS?
The good news is that because of a couple of direct listings last year (Spotify and Slack), investors and investment bankers are willing to consider alternatives to the traditional IPOs. The traditional IPO is still probably the best route for companies if managed correctly. Direct listings are a special offshoot that don’t rise any money, don’t care who their share holders are, and don’t want to have any say in the price of their offerings. There are certainly loud advocates for direct listings. Slack and Spotify had a rough start because stock price went down and generally companies and employees like it when their stock price goes up.
SPACS have been around for a long time and they raise money on the promise that they will identify a company to acquire. Investors like this because they can park their money and gain interest without having to make any immediate decisions. Once they identify the company they want they will merge with the entity. It’s like Pac-man where one company eats another and they become a public entity.
What are you looking forward to either end of the year or next year?
I am excited that investors and companies are exploring alternative structures for ways to go public because I think the Google IPO worked well and there has been so little of that coming to market. I am encouraged that companies are considering this now.
Thank you for being on Pandocap and sharing your insights on the capital markets. We look forward to having you back.