This Week in Startups Interest rates, inflation and “getting fit” with Brad Gerstner | E1639
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Dec 16, 2022 
Brad Gerstner, Founder and CEO of Altimeter Capital, shares his insights on the current economic landscape, tackling issues like interest rates and inflation. He discusses what it means to be founder-friendly and highlights which tech giants like Google and Meta are fit for today's challenges. Gerstner critiques the Fed's approach to stability and explores the implications of stock compensation models in tech. His perspective on the need for transparency and adaptability in leadership offers valuable takeaways for entrepreneurs navigating turbulent times.
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True Financial Performance
- Free cash flow less stock-based compensation is the true measure of a company's financial performance.
- RSUs, given to established companies, obfuscate salary inflation and misalign incentives.
Stock Options vs. RSUs
- Stock options align incentives between employees and shareholders, unlike RSUs.
- With options, employees only profit if the company's value increases.
Market Normalization
- The 2022 market downturn is a normalization after the abnormal period of 2020-2021.
- The aberration was free money, leading to the use of flawed valuation proxies.