Jeffrey Stewart is a serial founder who built Inc. 500 companies, an investor who’s backed ambitious entrepreneurs through GPO Fund, and a Fintech CEO who scaled across borders. At GPO Fund, his work focuses on helping founders accelerate international expansion and entry in the public markets. Most recently, after 3 years of research and over 100 expert interviews, Jeff published “Global IPO: The Great Rewiring of Capital Markets,” to showcase why there are great opportunities ahead for going public, as well as provide founders with an IPO playbook. Pulse 2.0 interviewed Jeffrey Stewart to learn more.
Jeffrey Stewart’s Background
Could you tell me more about your background? Stewart said:
“I started as a management consultant at Ernst and Young. I bring that up because one of our clients was the NASDAQ, so I got very familiar with many of the world’s top stock exchanges. That experience back in the 1990s influenced my thinking on the positive role public markets play to fuel innovation. Working with NASDAQ, I also got to evaluate the impact of the then-new World Wide Web. I realized the technology was seminal, and started my first of many technology-based, venture-backed companies. In 2018 I helped launch GPO Fund, a growth stage venture capital firm. We back ambitious founders who want to build generation-defining companies on a global, and eventually, public stage.”
Importance Of The Book For Investors
Why is your new book, “Global IPO: The Great Rewiring of Capital Markets,” an important read for investors, particularly right now? Stewart shared:
“AI is changing every industry, including the capital markets. The friction of listing is dropping at a time when wealth is becoming younger, more connected and much more international. AI means investors everywhere now have powerful tools to discover, analyze and trade public equities, 24hrs a day, anywhere in the world. Regulators and large Institutional LPs are also waking up to the downside of opaque and illiquid private markets. Even the change in the cost of capital is fueling a shift from “stay private forever” to public equity-based financing.”
Private Markets Gone Too Far?
Why do you think the private markets have gone too far? Stewart explained:
“The best founders have come to realize that staying private reduces flexibility. You become dependent on a small group of insiders as opposed to the endless diversity of investors only found in the global public markets. Early-stage VCs are also getting push-back as large LPs are asking when their “on paper” returns will turn into actual cash.”
Major Shifts In Capital Markets
What are the major shifts driving the re-structuring of capital markets? Stewart noted:
“Technology, demographics and geopolitics are all playing a role, but often overlooked are interest rates. For most of history, borrowing was more expensive and the equity markets played a critical role. For a brief, recent period, interest rates were low, which changed the incentives to stay private, because money was plentiful.”
Volume Of New AI Companies Impacting Public Markets
How do you foresee the volume of new AI companies impacting IPOs and the public markets? Stewart assessed:
“Focusing on ‘AI companies’ is the wrong lens; the bigger picture is companies ‘impacted by AI.’ Let me explain. Every industry is about to be disrupted by AI: pharmaceuticals, medical services, professional services, material science, manufacturing, retail, logistics, even agriculture. There is about to be a huge wave of new companies and many will use the public markets to go head-to-head with the industry incumbents. It will be an era of great turmoil, huge opportunities and massive investment.”
Differentiation As A Firm
As the co-founder of the GPO Fund, what sets your investment thesis apart? Stewart emphasized:
“Like many growth-stage VCs, we are former founders, but what sets us apart is our commitment to helping our portfolio companies accelerate international expansion and IPO readiness. Investors like our approach because it attracts the most ambitious founders.”
Significant Milestones
What have been some of your firm’s most significant milestones? Stewart cited:
“Last year we hit the milestone of returning more cash to investors than we have deployed. Having made our first investment in 2018 it was a strong validation of our strategy of helping portfolio companies accelerate their IPO readiness. Not every company goes public, but by being IPO ready, a company has more options (which also drives up equity value).”
Additional Thoughts
Any other topics you would like to discuss? Stewart concluded:
“The book is about Global IPOs, so our discussion has been around capital, but even more important than courting global investors is courting global customers and talent. It has never been easier to attract customers and talent from around the world. Management teams that think on a global scale have a huge advantage, because most customers, most talent and most capital is in other jurisdictions.”
