 Y ddwylo'r drwsiaeth yn dwydoeisio, a byddai'n gwybod i'r cyhoedd nôl i IPOs, ac mae'n gwneud i'n ddeithasio i ddim yn ei ddelwedd. Rwy'n rhan i'r drwsiaeth yn berdig a'i gydig i'r ddechrau. Felly, o'r pryd o'i ddweud y cyfrifiadau, sicrhau ei ddechrau, yn dweud o'r cyfrifiadau, mae'n ei ddechrau, ac mae'n ei ddweud i'r cyfrifiadau. Byddwch yn yr Gallai Newydd, ac yn fawr, Mae hyn yn ynnwigaf y Gymraeg i'w hoffio arfer o rhoi i'w fanfath a'r hoffio ar 1990 i'w nhw'r 2,000 oesol, mae'r hoffiaith yn rhaid datblygaeth y pwysig o'r rhaid o'r hyffes. A hyn ym mwynodd oherwydd mae'n sifat yn hoffio ar y gyrslu i fynd ymherwyddner oherwydd cyflengyfrif ar gael, ac mae'n rhaid i'n mynd o'n ni o'r ddau i dd Lywodraeth ymherwydd yng nghymredig. Roedd yma'n dysgu yma. y fel y cymorth ac mae gyda認od trwydor i gyhoeddech chi'n mynd i gyd am y cymorth yn cymaint yn so jechydnod gan y gweld hwnnw i gydych yn cyflog iawn. A mae rydyn ni'n gwybod dwi'n f applauds gyda'r cwmhwylion. Roedd yw e'n canidol hefyd a'r cwmhwylion, roedd e'n cael ei gwaith yma, oherwydd e'w peitio'r adegwyd a'r cyflogiaeth o'n doglwydd o'r cost oherwydd e'n gweithwyd a'r bwysig, oherwydd e'n cwmhwylion o'r mlynedd yn iCOs yn 2017. Waithe y prifes ar tynnig readyadau neu arnynt crytiau popeth? If we have a market, the public markets, where essentially one of the kind of bases of modern shareholder driven capitalism and thus for the underpinnings of the modern market economy, and so if we're moving away from that what are those consequences? So those broadly were the two themes that I wanted to push to do that a fantastic panel. Very briefly to introduce them over that, I don't know how I do this in the circle. Over there, Tony Fernandez, CEO of AirAsia, the largest airline in Malaysia, done several IPOs and I think planning to do some more. So we'll hear the perspective of someone who's been involved in that and hopes to do some more. Then next to him, Abidali Nimuchwala, CEO of Wipro, who and Wipro have just bought a period for 500 million. So they're big corporates buying, doing big investments in other corporates. So the big play investment, which saves the others going public. So that's the alternative perspective next to him. Bill Ford, CEO of General Atlantic, which is of course the private equity VC perspective coming from you here to my left. Matthew Prince, co-founder and CEO of CloudFair, CloudFair officially unicorn, a valuation of more than a billion. I don't know what the latest valuation is. I'll leave that to you to tell people, but you have not gone public yet and I'm sure we'll find out whether you're planning to. And then when he turns up, I don't think he's been a little bit delayed. Tom Farley, president and CEO of the New York Stock Exchange, who will no doubt have a strong perspective on what's going on here. So let's start with you, Bill. And why don't you give us a sense of why you think this is happening in the US in particular? Why have we had such a slowdown in the number of IPOs? Sure. Thanks, Zini. Thanks for having me here. I would say a couple of points. Brilliant. You just missed my... It was a very long erudite introduction when I said how absolutely wonderful you were. Tom Farley, president and CEO of the New York Stock Exchange. Hey, Tom. You know, one comment to make is that the actual volume of IPOs by dollar volume last year was up almost 50%. So actually 2017 was a good year for US IPOs. But what we've seen is I think a real decline in the small cap IPO. And that's been going on for 10-plus years, maybe even longer. And I think it's because of three basic reasons. One is a massive increase in the amount of private capital that's available to invest in high-quality private companies. There's only over a trillion dollars of uninvested private equity. There's probably another trillion of sovereign wealth and family capital that's interested in growth companies. The second is, and I hope we'll hear from this from Tom on this topic, but the regulatory burden, if you go all the way back to Sarbanes Oxley through Dodd Frank, the cost of being a public company has gone up dramatically and all the issues around compliance. And I think that's been a significant issue. And the third one is one that maybe doesn't get talked about as much, but I think is significant is really the change in the economics of the equity trading business. If you go back into the 90s with sort of the peak of the small cap IPO market, many of the investment banks who are underwriting these IPOs were able to enjoy very significant trading profits for these small cap companies. And that allowed them to pay for research, for market making, and really causing them to pursue it. But with decimalization and real change at the investment banks, there's very little desire to really spend money on research and on equity market making anymore for companies that have a cap, let's say below $2 or $3 billion. So, why don't we go through those individually because you've set up the structure brilliantly. And let's start, but let's start not with the sources of capital. Let's start with the regulatory burden, the costs of compliance. Tony, you've taken companies public and you're thinking about taking more companies public. Have you taken any public in the US? Actually, Tom has been trying to get me to do that. OK, so interesting. So, you know, how do you... You gave me one of the most amazing proposals I've ever seen from a stock exchange and it should be congratulated for his amazing marketing ability. We want to be... I mean, we're a fan of the public market and both positive and negative and we'd love to be in the NYSE, going back to Bill's point on the whole regulatory issue and the litigas kind of issues that come out kind of scared us. But we think that's something we're going to work through with Tom. I think going back to me, I mean I started this airline and I bought the airline for 25 cents and with two planes and now we've grown to 220 planes. We wouldn't be able to do that without the public markets. And we listed our airline in 2004 and it's been great. But you see the problems arising in the public market, the volatility, the short-termism. You know, two years ago my stock price was 70 cents. Today it's set a record at 414. We haven't changed fundamentally dramatically in those two years. That, I think, is one of the problems. Private investors have a much longer-term view and it's much easier to manage, I don't know if I haven't worked with Bill, but I assume it's easier to manage Bill than hundreds and hundreds of fidelities and wellingtons, et cetera, et cetera. We'll nicknash this, so anyway. He's not an IPO on the other side. I know, I know, I know. He's an American citizen. So I'm going to get Tom to respond in a second. Is the U.S. worse than everywhere else in terms of... Do you have those same concerns outside the U.S.? It is, in my opinion, it is the toughest. And I can't go into the history, et cetera, and there may be legitimate reasons for it. But when you're asking as to why we aren't, those are the concerns. And I know Bill said, I think, that the present administration is trying to address some of those things. But I mean, it is the best market to be in. It's the best market to be in for visibility, capital, et cetera. But these things hold us back and hopefully those will be sold in due course. But my main issue with the public market is other short-termism. You know, for an airline such as ours, it took us many years to develop Indonesia. It took us many years to develop the Philippines and we were hammered by the stock market. We stuck our ground because I'm a stubborn son of a bitch. And I said, I'm not going to, you know, the analysts were saying, close it down, close it down, close it down. Now both these airlines are worth in excess of a billion. So that, I think, is not something that New York Stock Exchange or anyone can address. Coupled with the fact that private investors are giving phenomenal valuations. I sit here for growth companies. I sit here and I look at, you know, we carry 89 million people. We have enormous data. But a similar company in Matthew's area from a tech field, we get 80 times valuation and I'm getting three or four times. So private investors are viewing things differently from public investors and have a much longer term view. And I think those are the issues coupled with regulatory, coupled with profit records and all kinds of new things that come up, which I think deters companies from looking at the private equity market. They're all really good points and we're going to get to the short-termism in a minute. But I just, Tom, let me ask you to respond to that, to the issue of regulatory and compliance costs. And, you know, I think there is a general view that they've got up in the U.S. that it's now a competitive issue in the U.S. Do you agree with that and what are you doing about it and how are you going to persuade Tony? So sure, and thank you for that. And first, let me just, let me just echo what Bill said. The IPO business in the U.S. is exceedingly healthy. For example, through January of this year, we'll likely be the biggest one we've ever had in the history of the New York Stock Exchange in terms of proceeds raised. In fact, may well already... But not in terms of number of companies. No, that's where I was going to go. And we likely will have five IPOs raising $700 million or greater the first time ever in the history of the New York Stock Exchange. But to your point, the number of public companies is down by close to half over 20 years while the aggregate market cap is up by three and a half times. So the average company is six or seven times bigger than it was. It's a very healthy market if you're a big company. What does that mean for a small company? It means there's a lot more regulatory costs. Let me broaden the scope of regulatory costs. It's not just the costs that came with Sarbanes Oxley and Dodd Frank, which are kind of strictly speaking regulatory costs, more internal audit, more compliance, so on and so forth. It's also the rise of the activist investor. The number of activist campaigns is increasing all around the world by about 100 to 150 per year. Last year there was close to 600 modified activist campaigns, many of which were in America, and shareholder class action lawsuits. So in the U.S., we've had around about 3,500 shareholder class action lawsuits over the last 10 years. And in other regimes, you don't have shareholder class action lawsuits. I just came from a meeting of the head of state in Hong Kong. They don't have shareholder class action. In London, it's enabled or allowed, but there's very, very few. So the costs are significant. But, and then I'll conclude, if you come list there like Nick did or Mark Stunn several times, you are holding yourself out to be listed on the New York Stock Exchange, which is going to have high regulatory standards. It actually has high standards to be able to list your company. And there's a benefit to that. It attracts capital, it attracts liquidity. There's a reason why we have $40 trillion in market cap, whereas the other exchanges I mentioned, great exchanges, London is $3 trillion or $4 trillion. Hong Kong, less than that. So if you list your company there, you're going to have tighter spreads, lower transaction costs. Your currency is going to be easier to use when you go do transactions. There's pros and there's cons, and that's how I look at it. And actually some of that scrutiny may not be a bad thing for corporate governments as well. We'll get to that in a second, but Matthew, from your perspective, your company is large, it might perhaps in a different era have thought about going public earlier. Clearly now hasn't yet. Tell us as a co-founder, as a tech entrepreneur, why have you decided not to go public yet and when you listen to this, which of the causes resonates most with you? Well I think certainly there's plenty of access to capital. And if we needed to raise private capital tomorrow, there would be probably people in this room that would be happy to write us a check for that. I think there's a time and a place for things as companies mature. When we first got started, there were three of us above a nail salon in Palo Alto. And at that time we didn't have formal audits, we didn't have a board, we didn't have all of those things. And then we raised capital from other people, from private venture capital investors. And we started to do things like have board meetings. And then we grew larger and we raised capital from other people, we started to have formal audits. Today our last round was led by Fidelity actually, and back in 2014. And we started doing mock earnings calls to practice to get ready to be a public company. And I think that we've always thought that that was the path that we were on. And at some point, I think you do have to move out of your parents' basement effectively. And so we're headed down that path, but we want to do it at the right time. And we've built a good enough business that we don't have to go public. There are two reasons you go public, either because you have to, you've run out of other sources of private capital, or because you want to. And back in 1999, in a former life, I was a securities attorney. I worked on six IPOs in one summer, and it was fun. And someday it might be ringing a bell or pushing a button, but again, I think there's a time and a place. And the availability of capital right now has allowed good companies to pick and choose what that time and place is. So the availability of capital means you haven't had to, but it sounds from the tone of your remarks that at some point you might want to. Why will you want to list? What is it that you will want to get out of it? Well, I think we have a duty to the people who've invested in us, both in terms of capital that they've provided to us, and then our employees in terms of the time that they've put into the company. And everyone who is an employee at Cloudflare is an owner of Cloudflare. And so we want to make sure that we can return that to them. And so, again, Michelle and I have always thought of this as, we're sort of climbing an infinitely tall mountain. And we would rather take lots of little steps than sort of one big step to get up that mountain. But going public is a big step in and of itself, which is why we've been for now a year and a half doing mock earnings calls every quarter with actual analysts listening in on them and doing the things to get ready so that when we do stand up there and ring the bell, it's less of a big change at the company. And again, it's a smaller incremental change. So it's essentially access to liquid markets so that your employees can... Can I just dive in a little bit, Matthew? You said another benefit is that shareholders can make different choices post IPO, meaning Matthew may choose to stay in for the long haul, for the full mountain climb, but there may be some other investors or early employees who say, I'd like to get liquidity. And I think one thing that versus selling a company's entirety you get from an IPO is this ability to make different choices. And I think that's a really valuable tool for a company like Cloudflare. Now, there are private markets and NYC and others have done things to create that liquidity without an IPO. But at the same point, we have competitors that have a lower cost capital than we do because they can access the public markets. You can attract a different caliber of employees because you have some sort of a liquid stock. So there are real benefits. And again, maybe more than anything else, it's just this is what you do as you build a larger company to show that you're credible to go through the regulatory hurdles. Yeah, they're costly, but there's a real purpose and a benefit for that. And that cost then gives people who are trusting their capital with us that we have controls in place, that we have those things. It's a badge of growing up. But the basement analogy is rather good. Kids move out of their parents' basement at older ages now, but at some point they eventually do. The other one is that it's almost like when you share a company, it's like playing with a toy boat in the bathtub. And then maybe it graduates to the swimming pool and then to the local pond and eventually to the lake. I think that we're now to the point where we want to go out on the harbor, but I'm not sure we're quite ready for the North Atlantic. And so I think that that's the question is, how do you take those little steps? And there's something very different about being kind of a one to $10 billion company to being a $500 billion company. And the public markets don't totally differentiate between that, but we're trying to think through how to create government structures to... I want to get to that at some point, how the public markets treat those. But Abid, let's turn to you, because you are coming at this from a different direction, which is you are probably one of the reasons why some tech companies haven't had to go public, because you come in with a very large capital infusion and buy them. So from your perspective, do you think differently now about investments in a way that is a sort of secular change for these companies that they don't have to IPO? Yeah, so, you know, I look at it from two perspectives. One is VIP at New York Stock Exchange, and there was value to it at a time. Of course, there is a cost of governance, and today we are a $8 billion company, but when we IPOed, we are an order of magnitude smaller. But access to the U.S. market, well, a lot of things about regulation and the inconvenience we can call, but there is a value to the corporate governance and a listing in a U.S. stock exchange provides you, especially when U.S. is a large market for you to be able to do business over here, and that's a big advantage that especially international companies get by getting themselves listed. The other is obviously capital, and that, to your point, is access to capital. There is much more avenues to access capital today than there were before, and especially in the tech sector where we invest and we can buy acquired companies or fund companies. There is also a value to the strategic secrecy that it provides, where the disclosure requirements, especially of your strategy and the secret sauce, which is why the company's value, especially in the early stages, is of value to stay private and not go public. And we see there's a competitive differentiator because if we are able to get companies where there's a great strategy, great product and a great team in there to be able to invest that money, and of course it helps with the large balance sheets that we carry. Can I now, before we turn to what the consequences of this are, though, ask whether there is actually a downside to these start-ups staying private until they've come really quite big. And let me throw out two. One is that actually the lack of disclosure that you can get away with means that problems get stored up, and we can all think of any number of companies where that's clearly been the case. And the second is there a risk that you have locked in through your series EF or whatever valuations that are kind of crazy valuations in this environment of very abundant capital with the result that actually you kind of can't go public because you're massively overvalued. I mean, that's something we've tried to be very careful of. We've had offers to invest in us at valuations that are significantly higher than we've had before, and that's relatively cheap capital for us to take. But the risk is that you get too far over your skis, and I think that you can see a number of high-profile technology companies that have taken very high valuations that just can't be justified by any revenue multiple, and then they get stuck in this place where they don't want to do a down-round because that creates all kinds of internal just challenges, and they have to wait to grow into whatever that valuation is. So we've tried to stay very disciplined at actually sort of taking what we thought of as the right valuation. The last time we raised money, we actually had to talk the valuation down slightly because we had people that were proposing things that were crazy, and again, that seems as an entrepreneur like a good thing, but if you get too far over your skis, that just creates a trap for you in the long term. Yeah, I think Matthew's dead right on this, and I think what we've seen happen over the last 10 years is the growth of very complex structures, preferred stock structures that really create a significant friction, and so it's valuation is one thing, but if you've got certain terms in the preferred stock, which is typically the form people invest in, it really makes it difficult oftentimes for boards and entrepreneurs to make the choice to go public until they can clear a fairly significant valuation hurdle. Yeah, that's something that the community doesn't talk about enough is the terms that you can get any valuation you want if you'll write whatever terms are in that, and a lot of these late stage rounds are putting in terms that have guaranteed IPO prices or the right to some sort of debt structure or something else which is involved. We again tried, we said, we want just vanilla terms as clean as possible, as close as you can be up a suit with common shareholders, and I think that's then made it so that we can make much more rational decisions where we're very much aligned with what our investors are doing. And how much is the kind of, not only the abundance of capital, but the abundance of capital from very different sources, so there's the kind of traditional VCs, there's the big corporates getting in now, the sovereign wealth funds, how big is the soft bank fund? I mean, it's got up 100 billion or something. So there's a lot of money. Is that clouding, and you can give me the founder's perspective a minute, but from your perspective, is it basically clouding everybody's judgment and that there's just far too much money being thrown in? I wouldn't go as far as clouding judgment. I'd say it's a very strong alternative for companies that maybe for good reason want to stay private. I think what was stated about strategy is important. A lot of times companies just don't want their strategy disclosed. Maybe they don't have the processes and rigor ready to deal with quarterly earnings reports, and those are good reasons actually to stay private longer, but what's different now from 20 years ago is that scale capital is available for private companies that wasn't before. I mean, multi-hundred-million-dollar equity checks for still relatively high-risk businesses is available. And again, not just from VC private equity, but sovereign wealth funds are active. The vision fund you mentioned from Softbank, of course, and wealthy families. I mean, and there's so much interest in getting exposed to technology. A lot of the companies we're talking about are tech companies that I don't see debating. How much turn is this a tech-specific phenomenon and a US-specific phenomenon? Or how much do you see the sources of capital and availability of capital changing dramatically for a company? Well, for me, the source of capital are really clearly tech-oriented. Not many people want to invest in airlines. Certainly, I haven't met any in Davos, except for Tom. If you'll come less. Exactly. Just want to tell one point just from an Asian perspective. I don't think there's anyone in Asia who's worked. I mean, everyone would love to listen to New York Stock Exchange, I think, for a variety of reasons. Valuation and image and brand. And I think no one's worried about the regulatory compliance, because, as you said, you get the valuation for it anyway, so you get it back. It's more the unknown of the litigist, the litigation. That kind of puts us, especially for an airline. But going back to your original question, I think a lot of the alternative capital is being driven to the tech side. That's where some of these valuations are coming up. That's where some of these big numbers are being thrown at. I don't think it's necessarily. And most of that is US-driven. So that's why you're seeing that. So I don't think it's an entire industry. I think many, many companies in the old industries are still trying to get capital from the IPO markets, et cetera. And then what I see as an interesting phenomenon is that many people are trying to rebrand themselves as tech companies. I want to try and say that I'm a tech company. I'm not an airline anymore. It's going to take me a while. I've got a lot of data. I've got 89 million customers. I've got all that data. It's a snap, which is a camera company. Exactly. So I do see that phenomena coming up. And that shows that people are saying, well, how come that Uber is worth this and we're worth this? And I think those are the questions that are being thrown out at the moment. So let's posit for the moment that the trend we've seen in the last few years is going to continue. So broadly companies listing later bigger deals, but smaller number of listings and tech having these multiple sources of capital are going to IPO later. Is that, where is that going to lead us in terms of the nature of basically capital ownership and capitalism? And what does it mean for the way businesses are run? What does it mean for shareholders? What does it mean for societies at large? And you mentioned short termism earlier as being one reason that you were a downside of being in the public markets, if you will. Are we going to get more long term thinking and better functioning businesses? Or are we going to get ones that are overvalued and don't have proper disclosure? And your ordinary person doesn't have access to the wealth creation that they're doing because they don't have access to the public markets. You must think that's a lot. I'm dying to pick up on two themes quickly that have been sure. Can I do it? And then I'll answer your question directly. The first is you asked are there negatives of not being public? I think the answer is obviously yes. You look at some of the high profile public companies. You think of Uber where Dara came out yesterday and said our moral compass wasn't pointed in the right direction. Well, as a public company, you're answering publicly to shareholders once a quarter. You are required to have a whistleblower hotline. You are required to have independent directors who care deeply about being sued. You think about other private companies right now who are dealing with management turmoil because of bad behavior in the workplace. Again, once every three months going in front of investors, having to have a whistleblower hotline. Or finally, you think of Facebook. Facebook showed up at their first earnings call without a mobile strategy and thought that was OK. They weren't all in on mobile. If they had been a private company, their stock would not have gone down by. I don't remember. It was enormous, 40%. They've now got mobile right and taken over the world. And that was the public market instilling discipline. Because I went a little long on that one, I won't mention the second point, which is there's also a benefit in having a public currency, a stock, because right now everything is going great, but eventually we'll hit a rough patch and Cloudflare as a public company will be able to go acquire companies with really great IP using their public currency. To answer your question directly, I'm an optimist. Again, it sounds like I'm a homer because I run the New York Stock Exchange. I think things are going well. We're having a bang-up year already here, coming off a great year last year. We were sitting here 10 years ago, Cloudflare would already be a public company. They're not a public company, so we haven't had a listing fee from them in the past two years. And investors like my father sitting at home in Bowie, Maryland, who doesn't have the wealth or sophistication to get into a hedge fund, hasn't participated or venture capital firm, hasn't participated in the wealth creation. Those are both negatives, one personally and one societal, but they're not the end of the world. Things are going pretty well, so I go ahead. Well, actually, if you aggregate from your father, there are an awful lot of people who are not in any way taking part in this wealth creation. And so it does mean that the benefits of this enormous wealth creation are accruing to a very, very small number of people. But on the flip side, there was a ton of wealth destruction in the dot-com bubble because there was a lot of small technology companies that got public that shouldn't have that people invested in. And the fertilizers of this world are getting into this. They're basically investing in private. But yes, go ahead. I think there is an issue about this from a societal point of view, but I divided in two categories, individual investors and institutional investors. On the institutional side, which your pension funds and other type of institutional investors, they are getting access to these private companies. Their allocation of private equity is going up from 4% to 10%, and it's trillions of dollars of more capital coming in. So many of the beneficiaries of these pension funds around the world are benefiting from great companies that we all know about. The place I worry more is on the individual investor side in really two dimensions. One is indexing. There's a ton of capital flowing into indexes, as we know, which is good. But there's a shrinking pool of public companies to be indexed against. And I think that's a negative for those individual investors. And the other thing is, I think the IPO market and individual participation in the IPO market reinforces the sense of capitalism being a positive. Because, well, this is great entrepreneur. They started a company like Cloudflare. I'm an individual. I get to buy in that stock and watch their success and participate in that success. Makes me feel good about the nature of capitalism and wealth creation. Now, I can't be an Airbnb. I can't be an Uber right now. I'd like to be, I use the product. I think that's a place where we're losing something in terms of a whole generation of young people who could become investors and might become more convinced that capitalism is a positive. I think that's the only way. Because while the overall prosperity is increasing, the world GDP is increasing, but the happiness index is going down. Yeah, yeah. And that's the reason, you know, disparity is not good for the society. And again, the democratisation of wealth that public markets provide is in a way hindered by not going public. So, there is a society in the future there. Let's open now to questions. But before I do, and this is not something that the wealth organisers have told them I'm going to do, so it may be very much against the rules, but I wanted to just have a show of hands around the room of how many of you think that the decline in IPOs or the slowing in IPOs that we've talked about absolutely for younger companies is a bad thing. A broadly a negative development. A few of you. Okay, that's really interesting. So it's not a broadly held view that it worries you too much. Now, are there any questions from anybody? There are mics. Yes, sorry. Is there any relationship between the decline in IPOs and the development of the shadow banking, which is the non-banking system? The market-based finance. Bill. I mean, most of the shadow banking that people talk about is in China. China does not have a well-developed equity market and Tom should really comment on this, but... Most of the shadow banking is in the US market because it's much bigger. You can see the report of the shadow banking done by the... I think you mean the broader definition of non-bank financing, so you mean... The G20 report. On the need. The stability report. But do you mean basically bond issuance and anything that is non-bank finance? Yes, everything from lending, leasing, credit, non-banking credit, all those intermediaries, private equity funds, asset managers, hedge funds who lend to companies without going through the banking system. So this is a huge finance. It's now reaching $90 trillion globally. And it's mostly US, China and Europe, of course. So I was wondering if there were a relationship because this is all money that is really from peer to peer, and it even includes crowdfunding and other things. So it's money that is really circumventing stock markets. I think, if I can rephrase the question, I think there's lots of different financial systems. Some European banking systems are very bank-focused, others much less bank-focused. They've been less bank-focused for a long time, but there have been lots of financial innovations, whether it's private equity innovations, whether it's the VC industry. Often the US was the epicentre of that. Has that been part of the reason the growth will turn to sources of the people? I mean, maybe, I'm sorry I didn't understand the question. Apologize, but I think that to your point, the US intermediates a lot of capital through the capital market and through the equity market. And it's one of the best things about the US system. Other countries intermediate much more through the banking system and they want to be able to have more regulatory control on that. Neither is good or bad. I just think, again, the strength of the US capital market is the fact that the securities market function generally pretty well. Are there questions? Yes, gentlemen there, right over there. Can you talk a little bit about the differences in governance? So one of the arguments that's being put forward is that, actually, look, you have this great public market, great analysts, they'll try questions. I mean, is that really true when you have kind of people who have a very small percentage of your company, maybe they don't care that much, the quality of families coverage is partial, I guess. Is it not better to have one or two very big, very engaged investors how would you compare the two worlds? Tom, why don't you go with that? That's a great question. You know, if there's one thing that I'd proffer about governance as a certainty, it's that we never have the perfect governance arrangements and we always have to keep evolving and approving how we think of governance. In fact, I just came from a meeting discussing dual-clash shares, which is a very hot topic in the US that you may be familiar with, but essentially there's some blowback from the buy side in the United States against dual-clash shares and some of the index providers have actually said companies with dual-clash share settings we're not going to allow to be in our indexes because we're not entirely certain that they're well governed. It's not a view that I hold personally but just to give you an idea. To answer your question directly, I think having a dispersion of shareholders is a great thing and having a dispersion of shareholder views as long as your board is appropriately constructed that the voices of those shareholders can be heard and that you're in a transparent, highly-regulated system which I think by and large the US gets right. We can always quibble with it and we can improve it but I think by and large we get it right. You know, and I'd add that the way, I think the answer is different at different stages in your company. When we were three people about the nail salon, you know, governance was, what should we do today? You know, where should we get a lunch? Right? As it would not have made sense when we raised our first capital for us to have to, in one of the reasons, we never took friends and family money because I didn't want to have to tell 15 different uncles what we were working on, you know, every Thanksgiving. And so, you know, as, if we're the boat that's getting ready to sail out into the harbor, the question is what's the governance structure that makes sense? And I think that, you know, we looked at things like dual-class stock and I think most of the time dual-class structures were set up in such a way that sort of believes in this great man theory. The Mark Zuckerbergs are genius, therefore let him completely control the company. I am not Mark Zuckerberg and I would actually be very nervous if, you know, the entire governance was controlled, the company was held by me. On the other hand, I think that we're not quite ready for the North Atlantic. And so what's the right governance structure? And I think we did something that was fairly unique which was we created a dual-class system but we said every single active employee at Cloudflare gets that second class of shares and those shares get 10 times the voting rights of the other shares. And by doing that we were trying to signal that the people who are coming to work every day, making choices about what we're going to build are the ones that have the biggest vote in what is the future of the company. Now over time I think we'll continue to build a bigger and bigger boat and at some point we'll be ready for the North Atlantic and at that point, you know, that structure may not be in place but I think kind of creative but thoughtful governance structures is a way of better bridging that gap between sort of the late stage private companies and the early stage public companies. I wanted to, yeah, I wanted to, because this gets very close to a point you raised earlier that we haven't come back to because the flip side of the right governance structure, or the opposite of it, is the question of short termism that you raised earlier. I mean, to what degree are you worried and, but we'll turn you to say it first, to what degree is, you mentioned the public markets made you worry about short termism. How can you change that? How can you improve things from your perspective within the public markets or what's the right structure that maximises long termism but also maximises oversight in the right governance? Just going back to the question, it's hard. I mean, I find a lot of people hate analyst meetings and all the road shows, et cetera, et cetera, but a lot of companies pay a lot of money to these management consultants to give them advice. I found a lot of bright kids, a lot of smart people who focus me, focus me on my strategy, push me, ask me the right questions. Some of them are irritating, let's be real, because we all think we're super brilliant. But it puts you in a position to think and focus. And I've found those analyst meetings, I've found those questions during calls really good in helping me formalise my strategy. So, you've got a much bigger pool of brains working you for free in some ways, all those research analysts, et cetera. And one of the reasons why we like the NYSE is because the research capabilities in America are fantastic. And so they push you to your limit. Doesn't solve everyone's quarterly targets. And I think that's one of the issues of the failings of the public market. And so how do you deal with that? I'm not sure, I mean just, it's communication really and it takes time, it takes a lot of time. But I mean ultimately people are governed by yearly bonuses and profits and quarterly things. And so getting someone to say, well I'm going to make Indonesia work in eight years, you know they stick two fingers up in me and say well that's going to help my bonus next year. So that I don't think will ever really solve that. But you know communication is the best way of looking at it. And I think some of the private markets have helped me. I'm saying well look at the guys investing in Uber. They seem to be very comfortable that Uber can lose billions every year because they have a vision and Amazon has showed the way as well when they were in the private and then they've gone public as well. And when they were public they continued to invest all their profits in for growth. And so there are some examples we can use. But I still believe that it's and personally it's better to have a larger spread of shareholders than one or two guys who might have the wrong idea on how your company going in and then you go down the wrong way. You know short termism, I think it's not about being a public company drives short termism the guidance that you give every quarter that you then need to achieve drives the short termism. And I think so there are remedies within the existing public market system because the benefits definitely outweigh on corporate governance, transparency, all of that especially for large companies to be public. And some of the short termism can be addressed by us. The few things that we do being a public company which drives short termism with the management incentives and guidance. And how of you Matthew because you clearly thought about this a lot. How are you going to balance those two? So I think one is what we've done in terms of dual class structure and if you are Mark Zuckerberg and you do have control of the company, you can make big bets like buying Instagram or buying for a billion dollars, buying WhatsApp for 20 billion dollars. I mean those are big bets, at least the Instagram bet is paid off handsomly if he didn't have that control would it have been as easy for him to make that bet? I'm not sure. Again, I'm not sure that I on my own know what the right thing is for Cloudflare for sure, but I'm pretty sure that the people who show up for work every day have a better sense than some hedge fund that's just trading in and out of our stock on a daily basis. I think one thing that's an interesting area to watch is what Eric Rees is doing around the alternative listing market with the idea that investors earn a voting right over a long term period of holding the stock. I think there's interesting work that's being done here and some of that's around new governance models, some of that might be around new market structures, but it's definitely trying to get the best of the ability to make those big long term bets like you see a Google or a Facebook do not be governed by just kind of what we hit that next quarter. And and really, but then at the same time having the right controls in place that you don't that you don't see fraudulent or or or malfeasant behavior. On the other question, yes, gentlemen. I have a question about your views contemplating it. There's lots of opinion on whether it's a good thing or a bad thing. I believe the NYSE allows for direct listing. Do you see it as a positive or a negative? Do you see it as apropos for some companies more than others? So in some ways, other than the fact that we all use Spotify, it's this, you know, big famous company. It's it's it's a bit of a non event. We've had, I think, 80 direct listings over the last five years. So it's kind of day we're gore. What's different here is, well, first let me tell you, a typical direct listing is a company emerging from bankruptcy. Those are almost always direct listings. We had one Avaya last week, the old phone company, if you're familiar. And what a direct listing is, is becoming a public company without raising capital. That's an IPO when you raise capital. Companies emerging out of bankruptcy, OTC upgrades, companies that trade in the kind of pink sheet type markets or companies that are listed on another exchange that want to come list in America. So we do these a lot. What's different here is it's a healthy thriving company that's direct listing. And so that's got a lot of attention. The actual model is not particularly new, nor do I think it's good or bad. It just it just is. And Matthew went through, why would I go public as a company? I have unlimited, nearly he didn't say this, but nearly unlimited access to capital. We have a business that's doing quite well. But, you know, when they were over the the nail shop, these were people without husbands and wives, without mortgages, you know, cared less about having current income. All of a sudden now these people years later, they do care, you need to be able to create a liquid currency sounds familiar to Spotify, and you can imagine a company like that saying, well, geez, if I don't need to raise the dough, why would I raise the dough? If successful, what does it mean for the traditional investment bank? Yeah, this is a fun topic in the media to write about. In reality, we're talking about a tiny, tiny tail of companies that have unlimited access to capital that kind of fit in this criteria. I mean, it's maybe two hands, we could talk about them. And many of those would say, well, geez, I'm going public, I can raise the dough. I will raise the dough and I'll save it for a rainy day. So I don't think you're looking at a kind of a paradigm shift where this will be the new model. I suspect others would certainly look at it, but it's not going to be it's not going to be the model going forward. Other questions? OK, so I'm going to, because we are coming to the end, I'm going to have one last look at, because I think you've covered the ground very well of why this is happening. We spoke about the regulatory compliance burden, we spoke about the sources of capital. We then have looked a bit about how to balance short termism and corporate governance and ability to think long term. But let's push a little bit this question of what. And when I say the status quo, I don't mean exactly this year's status quo, but this broad trend that you go to IPO later and that you have a smaller number of big public companies rather than a lot of very small ones. What does that mean? You talked a bit about what it meant for society in terms of people not feeling they were they were part of the big exciting new companies. How problematic is that? Is that just something we'll talk about at Davos? Or is it actually going to become a problem for the underlying social sort of acceptance of capitalism, the people? And they will be part of it through institutional investors, as you said. Yeah, but I think, personally, my view is that people do look at, you know, are these companies making a few billionaires or many millionaires? And, you know, the society is more accepting of a larger set of millionaires than a few billionaires. And I think that is where that is merit in accessing the public market in a retail. So does this become part of the broader sort of tech clash backlash that people think this is, you know, a whole set of innovation that's been fitting a few people and not broadly? And this is one aspect of that. Well, I think maybe on the margin, because the companies you're going to see go public are going to already very often now be established leaders. There was a day when the small cap IPO you were kind of rooting for the little guy to compete against an Amazon or someone like that. And they were coming into the market. There's less of that. I mean, more of the companies are coming out. If they've won their market like a Spotify, for example. So so I think there may be some men on the margin. I think I'm not as worried about the whole thing. I mean, again, even you take a global view. I mean, last year, $145 billion of proceeds raised for global IPOs, you know, up 30 percent, you know, very, very positive years. Capital formation is happening. Companies that need to access capital are getting it through the public markets. I think governance generally has improved dramatically in the over 20 years I've been doing this. I think the public markets have enforced additional and, you know, the New York Stock Exchange has been a leader in pushing for corporate governance as have many asset managers. So I'm more optimistic. You're optimistic. Excellent. Well, that's that's a very good note to end on. But before, I want all five of you to come up with one concrete prediction and we've got lots of lots of you here who can come up with a very comprehensive with you. I can ask what which big companies that are going to IPO in the next, let's say, two years that we should look out for. Airbnb. OK. What's going to be what you can answer the same question if you like, but also who else? Who are the target companies for companies like yours to buy now? Who are the next big ones of the sorts that you can tell us? Companies who are very innovative and more important for us is there is a higher synergy value than the standalone value of those companies. So that would be companies like you avoided the question. You know, you talked earlier about it. We didn't kind of elaborate and there's a level of clouding that you the word that you use, which essentially is that the valuation of some of those companies in private funding or alternate funding are seemingly higher than when they go on a public fund. And the reason is because when a large investor buys that company, the value that they see from their context in those companies is relatively higher than what a public listing would see on a standalone basis. And that's going to continue that people because of the sort of pace of technological change, people see specific technologies or specific that they're willing to pay above the odds for. Absurd, because the synergy effect is much bigger and people are willing to pay for that synergy effect. I'm going to have to ask you. So what are you going to are you going to do my favour and list on the New York Stock Exchange? I think he's doing me a favour. Oh, you're both together. No, I'd love to. That was all about doing deals. No, no, I'd love to. I think I'm a big believer in the public markets. There are obviously some flaws. I wouldn't be where I was without the public market. And I think there's more pluses than minus. I don't think a lot is going to change. And I think we've got a unique situation with this tech world. And so hopefully one day I'll be pressing the bell with or gone whatever he chooses me to press at the New York Stock Exchange. A lot of my friends are in the room on the stage that run private companies. They would all say I've never pressured anybody or suggested you should hurry up and do an IPO. When I'm pushing him is when you're ready, when you're ready, do it with us. You know, there's a big difference between the two. So you don't get out of my specific question. So what's going to be your most exciting IPO this year? What are you really hoping for? Well, we actually have the right now as we sit here, the largest Latin American technology IPO ever is pricing on the floor of the Stock Exchange, which is really exciting. It's a Brazilian payments company. They raised $2.3 billion last night. So that in and of itself is fun. We had one of the guests here mentioned Spotify direct listing if that comes to pass. And then the ones that are mentioned in the press a lot is happening within the next two years. I think the companies Airbnb, Uber, and Saudi Aramco have all said they intend to IPO next year. I was going to mention Aramco if you didn't. Yeah, so I'm like anyone, you know, a big, fun IPO with geopolitical involvement. It's absolutely fun. What's that? I said, you're confident that you're going to get Saudi Aramco to list on the NYC? I didn't say that. I just said, you asked which IPOs am I excited to kind of be a part of and watch. And that's one of them. And I think obviously I have to ask you having we've just had a whole hour talking about IPOs. When's it going to happen? So my legal counsel told me I can't answer that. So I'll answer a different question. I think two big trends that could be sort of bit flip changes, not necessarily could be bit flip changes to watch. One, China doesn't yet have a sophisticated equity market, but they want one desperately. And there's a lot of pressure from the government on Chinese companies to move back home. And so I think that's one thing to watch that could really change US equity markets and other world equity markets. The second thing, which is more short term, is that the repatriation of cash that is being created by the change in tax policy is going to put an enormous amount of cash on the balance sheets of large tech companies that are already public. And there are really only a handful of things that they can do with that cash. They can invest in R&D. They can dividend it out. They can buy back their own shares, or they can go buy other companies. The answer is they'll do a little bit of all four of those things. And the process of them going out and using that capital, that could change how some of the later stage tech companies that are thinking about an IPO, that they might see that as an attractive option, especially if that pushes valuations. So you get bought by Apple rather than doing an IPO? Never know. I think with that, just to make it clear that I understood on the Chinese point, which is a really interesting point, you're talking about companies like Alibaba, the ones that are listing outside of China and now going back. Well, that is a tantalising point to end on. But I'm afraid we've come to the end of our time. Thank you all very much indeed. That was a really, really interesting question. Thank you.