The Twenty Minute VC

Imran Khan: Why the IPO Market is Not Closed & Lessons From Taking Snap & Alibaba Public | E1194

Imran Khan is the OG of IPOs having taken some of the biggest companies public including Alibaba, Snap, Box, Weibo and more. Today, Imran is the founder and Chief Investment Officer of Proem Asset Management. Prior to co-founding Proem, Imran served as Snap Inc.’s Chief Strategy Officer. Under his leadership, Snap’s annual revenue run rate increased to $1.6 billion from zero in less than four years. Previously, Imran was a Managing Director and Head of Global Internet Investment Banking at Credit Suisse where he advised on more than $45 billion-worth of Internet M&A and financing transactions. ----------------------------------------------- Timestamps: (00:00) Intro (01:07) Analyzing the Current Closed IPO Window (03:56) Should Founders Accept Lower IPO Prices or Stay Private Longer (07:08) Solving the Illiquidity Problem in Extended Private Markets (12:08) Will Revenue Multiples Reinflate or Is This the New Normal? (20:44) Is the M&A Market Stalled Due to Lina Khan's Policies? (26:12) Should IPOs Be Priced for a Pop or Perfection? (29:29) How the IPO Process Works (36:41) Does Private Market Insight Give an Edge in Public Markets? (38:48) How Would a Harris vs. Trump Administration Impact Market Sentiment? (41:30) Imran on the Growing Gap Between CapEx Spending and Revenue in AI (48:56) How Imran Landed the Alibaba IPO (55:48) Should We Continue Investing in China Given Current Uncertainty? (59:03) Biggest Regret from Your Time at Snap (01:05:32) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Imran Khan We Discuss: 1. Are IPOs F*******: How does Imran assess the state of the IPO market today? Can companies really go out with $100-$200M in revenue? Will we see revenue multiples reflate? Can venture continue as an asset class if they do not? When does Imran expect the IPO market to really open? 2. Is M&A F******: How does Imran assess the state of the M&A market today? How do founders need to change how they think about M&A? Why are they to blame for the lack of M&A activity we have today? To what extent can we blame Lina Khan for the lack of M&A? Why would a company go do an M&A process today when it is unlikely to be approved by the SEC? Why does Imran believe in the case of Wiz, it was a mistake for the company not to do the M&A? 3. AI’s $600BN Question: Capex Spend: How does Imran analyse the insane capex spend we are seeing from Meta, Google and Amazon? How does Zuck not having his cash cow as the cloud business change how he can act? How does this compare to Google’s capex spend 20 years ago? What can we learn from that? 4. Going Public: The Process, The Players and Jack Ma & Jamie Dimon: What is the literal process to take a company public? Who sets the price? What do large institutions want in companies going public? What are some of Imran’s biggest lessons from taking Snap and Alibaba public? What are some of Imran’s biggest lessons from Jack Ma, Jamie Dimon and Evan Spiegel? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Imran Khan on Twitter: https://twitter.com/dottkhan Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #20vc #harrystebbings #imrankhan #snapchat #proem #venturecapital #alibaba #ipo #capex #market

Imran KhanguestHarry Stebbingshost

Aug 25, 20241h 11mWatch on YouTube ↗

WHAT IT’S REALLY ABOUT

Imran Khan Explains IPO Myths, Valuation Reality, And Public Market Power

Imran Khan argues the IPO market is not closed; instead, private companies and their investors are clinging to unrealistic valuations set in the zero‑rate era, making them unwilling to list. He contends that staying private too long creates illiquidity, masks permanent capital loss, and exposes investors to technological regime shifts they can’t easily adapt to. Khan strongly prefers businesses to go public earlier, emphasizing GAAP earnings, cash flow, and gross margins over revenue multiples, and believes public markets make companies better operators through constant feedback and discipline. Drawing on experience with Google, Alibaba, and Snap, he also dissects IPO pricing, M&A dynamics under stricter antitrust scrutiny, AI CapEx versus returns, and the cultural difference between missionary and mercenary employees.

IDEAS WORTH REMEMBERING

5 ideas

Reset private valuation expectations if you want IPO optionality.

Many companies raised at inflated 2020–2021 valuations that public markets will not support; founders and boards must accept lower prices as a temporary snapshot and focus on building cash‑generative businesses over time.

Go public earlier to build a stronger, more resilient company.

Public markets provide daily feedback, acquisition currency, and pressure to improve operations; Khan argues founders, employees, and even product innovation (e.g., AWS, iPhone, GPUs) have all thrived under public market scrutiny.

Stop over‑indexing on revenue multiples; prioritize profitability economics.

Khan calls revenue multiples a “BS multiple” except in specific high‑margin, predictable SaaS cases; investors should underwrite to long‑term earnings and cash flow using growth, gross margin, and steady‑state profitability, then back into any revenue multiple.

Illiquidity and hidden permanent capital loss are building in private portfolios.

Allocators chased low volatility in privates and market‑neutral hedge funds, but many private marks have not been written down; DPI is low and some losses are permanent, which will likely slow new private allocations.

Culture should be built around missionaries, not mercenaries.

If stock price or IPO valuation swings destroy morale, Khan argues the founder failed culturally; employees who leave when prices dip may not be the right long‑term builders for the company.

WORDS WORTH SAVING

5 quotes

I don't think the IPO market is closed. I think the issue is companies don't want to go public because their expectations are too high.

— Imran Khan

If you're building a company for a long period of time and you generate cash flow, you will create value. What is your IPO price? It doesn't matter.

— Imran Khan

No, revenue multiple is a BS multiple. Why would somebody give a shit about revenue multiples?

— Imran Khan

When you're not telling your story, somebody else is telling your story.

— Imran Khan

Great founders are great at pivoting. A cat never becomes a tiger.

— Imran Khan

Why the IPO market appears ‘closed’ and the role of misaligned private valuationsBenefits and discipline of going public versus staying private longerValuation frameworks: revenue multiples, gross margins, cash flow, and earningsShifts in institutional capital allocation to private markets and resulting illiquidityRegulation, antitrust (Lina Khan), and the real constraints on M&AAI CapEx, productivity, and long‑term impact on incumbents and marketsLessons from taking Alibaba and Snap public, including IPO pricing mechanics

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