Gurley explains top banks deliver worst execution because they serve buy-side clients, not the company going public.
“So you've got an agent who's looking after multiple parties, the company, but guess what? Also the buy side.”
Gurley argues banks serve buy-side clients as true customers, not the startups going public.
“Now, if you look back at that chart and you say, what if their job is to pass along the most profits they possibly can to the buy side, then the chart makes sense.”
Gurley argues banks face a multiple agency problem, serving buy-side clients rather than the companies going public.
“There's an area of study in economics called, the agency problem, and and there's a the variant of it called the multiple agency problem.”