One of the most influential VCs in Silicon Valley told startups to ‘call Morgan Stanley’ after Slack’s successful direct listing

Bill Gurley of Benchmark Capital speaks onstage at the TechCrunch Disrupt NY 2013 at The Manhattan Center on April 29, 2013 in New York City.

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Bill Gurley of Benchmark Capital speaks onstage at the TechCrunch Disrupt NY 2013 at The Manhattan Center on April 29, 2013 in New York City.
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Brian Ach/Getty Images for TechCrunch

  • After Slack launched on the public market Thursday in a nontraditional direct listing, a prominent venture capitalist is recommending the approach – and a particular bank to execute the deals.
  • “If your company is interested in a direct-listing, recommend you call Morgan Stanley,” Benchmark’s Bill Gurley said Thursday in an unconventional tweet.
  • Slack is the second notable technology company to debut on the public market through a direct listing. The first was Spotify’s 2018 debut, to which Gurley also nodded.
  • Visit Markets Insider’s homepage for more stories.

Slack‘s journey to the public market was unconventional, with its Thursday direct listing that eschewed the traditional initial public offering process.

A prominent venture capitalist, Benchmark Capital partner Bill Gurley, is now applauding the launch, pushing the direct listing approach, and even boosting one of Slack’s financial advisers in the process.

“If your company is interested in a direct-listing, recommend you call Morgan Stanley,” Gurley said Thursday in a tweet thread. “Other banks want to position direct listings as ‘exceptional’ or ‘rare.’ MS believes they are 1) a better mousetrap, and 2) can be used broadly.”

In an unconventional move, Benchmark's Gurley recommended startups look to Morgan Stanley if they're interested in going the direct listing route.

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In an unconventional move, Benchmark’s Gurley recommended startups look to Morgan Stanley if they’re interested in going the direct listing route.
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Twitter.com

Direct listings are relatively new territory for the technology landscape, as Slack is only the second noted tech company to go this route after Spotify’s 2018 debut.

It’s notable that Gurley is not only touting this approach, but in essence marketing Morgan Stanley as the choice investment bank to carry out such a deal.

Read more: Inside Slack’s direct listing: Here’s what actually went down between the tech company and its Wall Street advisers

Morgan Stanley, along with Goldman Sachs and Allen & Company, served as Slack’s financial advisers on its direct listing; they also ran Spotify’s direct listing last year. Morgan Stanley served as the adviser to the designated market maker, Citadel, on the Spotify listing, and is the named adviser to the DMM on the Slack listing.

Morgan Stanley did not immediately respond to Business Insider’s request for comment.

Benchmark’s Gurley has long been known for his early investment in Uber, which debuted on the New York Stock Exchange earlier this year through a traditional IPO. Morgan Stanley also led the ride-hailing giant’s offering.

On Friday, Slack slipped below its opening trade price of $38.50.

Now read related coverage from Business Insider:

A former Slack board observer says there was ‘no hesitation’ about its unusual public offering, and she thinks Slack’s successful direct listing will encourage more startups to do it

This open source messaging startup raised $50 million to take on Slack and Microsoft Teams and rope in customers who care a lot about privacy

Slack’s $17 billion direct listing could be the IPO game-changer Silicon Valley has been waiting for. But others say it’s a techie delusion.

Slack shares.

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Slack shares.
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Markets Insider