Welcome to the Boardroom Governance Podcast. I’m your host, Evan Epstein. In this episode, I talk with Barrett Cohn, the CEO and co-founder of Scenic Advisement, a SF based investment bank specializing in servicing the liquidity needs of high growth, late-stage technology companies, their investors, and founders. Formerly, Barrett served as a CEO of a children's educational media company and worked at Lehman Brothers in SF helping investors connect with non-public startups. He represented early Facebook and Twitter teams which led him to found Scenic to institutionalize the secondary market for private company stock. He also served as an advisor to Howard Schultz’s Maveron Ventures. In this podcast, we talk about the current state of private markets, its regulation and the trend of companies staying private for longer. We also address trends such as VC firms creating evergreen funds, regional differences in the tech ecosystem, the collapse of SVB and First Republic, and the booming AI market. If you like this show, please consider subscribing, leaving a review or sharing this podcast on social media. You can find all the show notes on the website boardroom-governance.com and please feel free to subscribe to the Boardroom Governance Newsletter at evanepstein.substack.com
0:00 -- Intro.
1:30 -- Start of interview.
2:12 -- Barrett's "origin story".
6:11 -- His start in finance. First in Stone & Youngberg then in Lehman Brothers in SF. His first secondary market transactions in private company stock (Facebook) in 2007.
8:54-- His experience working at SVB (internship with wine finance team) and Lehman Brothers (business development).
12:10 -- The early days of secondary market transactions for private company stock with SecondMarket, later acquired by Nasdaq in 2015 (now Nasdaq Private Market).
14:25 -- His entrepreneurial stint as CEO of Juno Company, a children's educational media company.
15:56 -- His VC stint as an advisor with Maveron.
17:20 -- On the founding of his firm Scenic Advisement in 2013.
18:12 -- History of investment banks in SF helping founders to get liquidity (the Four Horsemen of Silicon Valley’s financial community: Alex.Brown, Hambrecht & Quist, Robertson Stephens & Co. and Montgomery Securities underwrote a large number of IPO offerings, both before and during the dotcom boom.)
20:36 -- The ethos and vision behind Scenic Advisement. "The opportunity was to build a bank that really was the standard bearer, establishing best practices so that [institutional investors] had a counter-party or a middleman who could speak their language and conversely, the people building great companies had a partner who they could trust, because that partner had empathy: they were ex founders, ex VCs or from the community, not some transactional banker who lives 3,000 miles away and knows nothing of the company but knows that there is a big fee to be had and a league table to be on." "Our plan was to drive hard empathy."
24:17 -- On the current state of private markets. "It's been a boom marked by irrational exuberance, and then a correction, as markets do." "But I can tell you, and I do so with great thanks, that the market is thawing and we are starting to see investors come back." "I could have taken all of 2022 off, and from a stress perspective, it would have probably been beneficial, but I just didn't have a crystal ball."
27:42 -- On the regulation of unicorns and private markets generally. Going dark speech by SEC Commissioner Lee (Oct 2021).
33:08 -- On the Stay Private for Longer ("SPL") advice in Silicon Valley ["The worst advice" per Gurley and Rabois]. "Companies now stay private long. That's it. This is not a trend, it is a market reality at this point." "It's also totally business dependent."
37:52 -- The opportunities and challenges for founders, investors and employees in private markets. "The Sequoia move to an evergreen fund structure is a brilliant idea." "The Stripe multi-billion financing was the company being really proactive to options expiry, to ensure that the most important asset at Stripe, the people, are made whole or don't loose the benefit of the bargain (that would be awful for everyone and for morale)." "We are going to see more and more of that."
39:39 -- How companies treat employees vs ex-employees on stock options: "It varies from company to company and from founder to founder. My advice typically is to be egalitarian."
41:21 -- On regional differences in tech ecosystems in the US.
43:47 -- The impact of the collapse of SVB and First Republic in the SF/Bay Area tech ecosytem. "I believe in diversification. I believe in selling early and often. I want to implore founders and investors to take chips off the table when you can, because you can't always and things go away. People forget that."
47:40 -- Thoughts on crypto and digital assets market.
49:17 -- Thoughts on Artificial Intelligence (AI) market. "It's the next major wave. Unlike crypto and digital assets, this is not a fad."
51:05 -- The books that have greatly influenced his life:
51:38 -- His mentors, and what he learned from them: the most impactful mentor for him has been his mother.
52:58 -- Quotes he thinks of often or lives his life by: "Have hard conversations early and often." "Empathy is a very important tool even when delivering difficult messages."
53:25 -- An unusual habit or an absurd thing that he loves: sneaker collection and tequila ("it's like love in a bottle").
58:14 -- The person he most admires: entrepreneurs.
Barrett Cohn is the CEO and co-founder of Scenic Advisement, a San Francisco based investment bank specializing in servicing the liquidity needs of high growth, late-stage technology companies, their investors, and founders.
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Twitter: @evanepstein
LinkedIn: https://www.linkedin.com/in/epsteinevan/
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Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License