Opinion
Khan: IPO market is open, but private company valuation expectations are unrealistic
“I don't think IPO market is closed. I think the issue is companies don't want to go public because their expectations are too high.”
Opinion
Khan: Startups should IPO earlier and revenue multiples are a meaningless metric
“I'm a big proponent that companies should go public earlier than later, and no revenue multiple is a BS multiple.”
Opinion
Khan: Morale collapse from falling stock prices signals a founder culture failure
“I would challenge that in that case, the founder failed to build a culture.”
Opinion
Khan: VCs claiming founder-first loyalty over LPs are dishonest or clueless
“No, because your fiduciary responsibility legally is to your investors who gave you money. Is the guy who manage money for a fire track, you know, fire, you know, fighters, or who manage money for the teachers, You're, they give their pension money to you. You…”
Opinion
Khan: Criticizing 20% to 50% IPO stock pops is misguided
“So I have great respect for Bill Gurley. He's a very, very smart guy incredibly talented, but this one thing I think he, I don't agree with him, you know I think he's over-focused on One day stock pricing. Ah, now listen, if the stock doubles, that's obviously…”
Prediction Not checkable as stated
Khan: Taxing Unrealized Capital Gains Would Destroy Real Estate
“What happens to the real estates? People who own all this real estate, they are illiquid. Are you going to charge them an unrealized gap gain? So they have to sell the real estate. You're going to destroy the real estate market.”
Insight
Khan: Founders obsessing over valuation are neglecting their primary job
“Over obsessing about the valuation of your business is not the right thing to do, because at the end of the day, a founder job is to create business. What is the value of the business? That's the job of an investor. So a founder who obsessed with valuation, th…”
Insight
Khan: Employee attrition during stock price drops is good for companies
“But if you hire missionaries who believe in the company's missions, who believes in your leadership, I don't think the stock price make that big of a difference. And actually, if the stock price goes down and those employees leave, it's probably a good thing f…”
Prediction Not checkable as stated
Khan: Private market investments face severe write-downs and permanent capital loss
“People didn't write it down to zero or near zero, And that will happen over time, and then people will realize that it's not only a DPI issue, it's also permanent loss of capital. I don't think people are realizing that they have permanent loss of capital in m…”
Insight
Khan: Keeping tech companies private long-term risks obsolescence from 15-year cycles
“Why it's really bad from an investor perspective to encourage companies to stay private very long is this technology landscape shift every 15 years. So if you look at, you know, late seventies, early eighties, it was a microcomputer. Mid sixties was mainframe …”
Insight
Khan: Revenue multiples work for SaaS, but not delivery or consumer firms
“It's totally fair to look at SaaS business that way, because SaaS business, you know, 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 c…”
Opinion
Khan: High seller expectations, not the FTC, freeze the M&A market
“I actually don't think the M&A market, you can blame, 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 on everything. I think the problem in M&A market is also the same thing.…”
Opinion
Khan: Wiz likely made a mistake rejecting Google's $23 billion buyout offer
“When a business is very small, it's very easy to look at the business saying that, hey, this could be a great business, and in a ways very much could be, I don't know, but the reality is, you know, how many times we have seen that every 50 companies we look at…”
Prediction Not checkable as stated
Khan: IPOs with minimal day-one pops cause aftermarket stock crashes
“If they're buying the stock at the price that it doesn't go up, only goes up 10%, they're gonna dollar-weighted average, so they're not gonna go buy the stock. So you're gonna have a supply belt that, you know demand imbalance, they will probably sell the stoc…”
Insight
Khan: Large asset managers dump small IPO allocations that lack meaningful scale
“If you give Fidelity a million dollar allocation, they will dump the stock, you know. They might disagree with that, but, you know, a million dollar, you know, ultimately, if you have to think about it, if you're a portfolio manager, right, you're owning 30 na…”
Opinion
Khan: Public Investors Manage Short-Term Stock Risk Better Than VCs
“So I think Sequoia is right that they have that information and they, if they want to take a 10 years view, I think that's totally fine. But in a one to two years basis, they probably, as you, you're right, they're probably not going to be better than a public…”
Insight
Khan: Large language models are entry points like web browsers, not ultimate value
“LLM is just the browser. In my mind, there's like LLM is not different than the browser. Like obviously it's very different, but it's the entry point to what you want to do.”
Insight
Khan: Waiving pre-IPO lockups for institutional investors has zero company cost
“So that lockup, while it was incredibly valuable to investors who bought that security, had zero cost to the company. So those are very creative transactions. So we give them the no lockup, you know, and they were fine doing the deal, you know, but the cost to…”
Disclosure
Khan: Snap's finance team questioned acquisition prices that Spiegel underwrote
“So Evan from a day one had a very deep conviction on his product and, you know, like the lenses, acquisitions that we acquired, you know, Evan looked at the product and he knew exactly how people are going to use the product. You know, we finance guys. I'm lik…”
Opinion
Khan: Public market investors should not make early-stage private investments
“I think it's a mistake. I think public market investors should not go deep into private investment.”
Assertion Not checkable as stated
Khan: Private tech valuations have not corrected to match public market realities
“In the private market, that valuation didn't really correct, and so they want to go up public at a valuation that just doesn't make sense in a public market, right?”
Insight
Khan: Private markets face a talent shortage, not an idea shortage
“I actually don't think there is shortage of ideas in the private market, but I think there are shortage of talent to execute those ideas in private market.”
What-if
Khan: Box and Dropbox margin expansion required public market discipline
“Like, I don't think the margins that Box and Dropbox is generating, if they could have generated, if they would just stay private. Because the growth was slowing, they were forced to look at the business and run the business better.”
Opinion
Khan: Existing investors marking up rounds for employee liquidity is problematic
“I don't think it's a great look when you're existing investor marking up that existing deal to give employees the, you know, liquidity. I'm surprised that investors are not, like, allocators are not asking the hard questions.”
