SPEAKER_00: i'm gonna throw something out there you love talking about uber and doordash kind of joining up all right instead of paying for reddit which by the way 18.8 billion today so what 25 to take it

SPEAKER_02: off the table probably jason yeah you got a 30 premium when you take a company yeah maybe even

SPEAKER_03: 50 sometimes because it spikes when the rumor comes out and then you have to beat that number

SPEAKER_06: after it yeah so call it 22 i don't know three billion short or or you could buy substack right

SPEAKER_08: but yeah everyone's gonna freak out oh my god don't train against my data so here's what you do you buy substack and then you tell everyone you can keep your current deal with substack no training off your data we're taking a 10 cut but if you let us train off of your substack no cut at all

SPEAKER_10: yeah or how about if you let us train against it we'll give you a hundred and ten percent of whatever

SPEAKER_12: your subscription revenue is so you got a million we'll give you a hundred k on top of it if you publish on this regular schedule and we like your content so yeah that's a great idea this week in

SPEAKER_15: startups is brought to you by squarespace turn your idea into a new website go to squarespace.com twist for a free trial when you're ready to launch use offer code twist to save 10 off your first purchase of a website or domain fidelity private shares if you want the all-in-one equity management platform fidelity private shares has you covered visit fidelity private shares.com and mention this podcast for 20 off your first year subscription and oracle oracle cloud infrastructure or oci is a single platform for your infrastructure database application development and ai needs save up to 50 on your cloud bill at oracle.com twist hey everybody welcome back to this week in startups i'm your host

SPEAKER_02: jason calcanis with me my co-host alex wilhelm hey hey x.com alex i'm x.com jason we have a full docket it's monday march 31st the first quarter is about to end yes sir my lord that went quick and with it

SPEAKER_20: my ski season 33 days didn't hit the 41. guess there's always a chance i might be able to jump on a

SPEAKER_02: last minute ski trip but it's seeming like it's over everything's starting to melt what do we got

SPEAKER_06: in the news today man there's so much going on i thought we'd talk about palantir just for a hot second oh sure we have riffed on this company ad nauseum especially back when it was at or near

SPEAKER_08: all-time highs and what's changed is that the company is now in a bit of retreat as you can see

SPEAKER_24: here from this chart made by the fine folks over at sherwood we were covering the company when it was doing this right here taking a look at it going what's going on and people told us this would be

SPEAKER_12: the stock going from 100 to 121 dollars it went parabolic sometime i guess you know when trump uh started his um trump's inauguration it looks like literally january 20th ish it went from 60 a share

SPEAKER_29: up to 120 it doubled it doubled and essentially what is that jason less than a quarter about a month

SPEAKER_09: month and a half looking at that chart yep and so it's come back down to earth now we're trading at

SPEAKER_12: about 80 yes and uh the 50-day moving averages yeah i mean there seems to have been this incredible

SPEAKER_02: hope that the stock market would rip under trump then trump said remember i said those things about

SPEAKER_12: tariffs wasn't joking i'm going to literally create market chaos until april 2nd which i guess is our new

SPEAKER_09: independence day it's not going to be whatever one hopes i don't think okay so palantir's i think

SPEAKER_37: it's wednesday april 2nd uh and so palantir is a great company they have great products i think

SPEAKER_02: they were growing 30 or 40 percent year over year if i remember correctly on a two or three billion dollar run rate so this is a legit company alex carp is just goat level ceo they're doing important work in the world but sometimes a stock becomes a meme stock and i can tell this because anytime we talk about it hundreds of accounts will come into my replies and now they're even paying the three

SPEAKER_12: dollar donation uh to charity to reply if i were to mention palantir has the highest price to sales ratio we've ever seen right i think it was something like 80 at the peak 70 or 80 price to sales ratio incredibly high yeah if it's doing two or three billion in revenue and it's worth 80 billion dollars

SPEAKER_42: you know you start to figure out what that price to sales ratio is that would be 40 uh if we were

SPEAKER_06: to do that exactly just for fun jason i just pulled up the uh bessemer cloud index for folks on audio and i sorted it by essentially its current uh revenue multiple it's actually enterprise value divided by annualized revenue but uh at the absolute peak of all the cloud companies that

SPEAKER_24: bessemer tracks palantir is at 59.3x the next highest is 21.3 so even though it has come down it's

SPEAKER_02: still incredibly expensive and the average looks like it's 12. right so here's what happens in

SPEAKER_12: markets i'm not a market expert a private market expert but public markets generally what happens is if a market retreats like we're seeing because of the tariffs and just the general non-predictable market we're in i would say is a gracious way of saying it like it's hard to know what is going to happen yeah because of that lack of predictability the market constricted the chances of a recession went up everybody's just a little bit on edge and the trump bump went to companies that were you know in his orbit or military etc this was already a meme stock like company or a meme stock not and a real

SPEAKER_02: company so who's going to take it on the chin first when a market retreats the highest valuations get corrected first yep and the the ones that might be the lowest will lose the least because

SPEAKER_12: i mean if you compress to three times four times five times your sales people are going to be like

SPEAKER_02: huh there's no compression left that's actually a buy so that's all this is is just reversion to the meme if you see uh i always do this when i'm at a basketball game because of the threes if you see a team shooting 50 60 70 from three you can be sure it's going to come back down to the league average

SPEAKER_12: of 35 or whatever it is on a team basis if a team is shooting 10 from three you know at halftime yeah

SPEAKER_48: it might go back up to 35 reversion to the meme and the mean is a known thing so i think reversion to

SPEAKER_08: the meme should actually become part of our lexicon because at some point i presume palantir will go back

SPEAKER_46: up due to market enthusiasm so perhaps we're going to need both terms frankly or maybe um sometimes

SPEAKER_52: people go okay that was fun let's go on to the next meme stock or let's make another stock into a meme

SPEAKER_02: either way you know if you owned a bunch of shares of a stock that becomes a meme stock what your best bet to do as far as i can see is to sell it and then to buy the ones that are the great companies that

SPEAKER_12: are at the lowest enterprise value by run rate or just price to sales ratio sure and so if there were people who were lower on the list that you felt as strongly about the management team and the product

SPEAKER_48: and the growth maybe that's a better buy so uh the market giveth the market taketh away uh let's keep

SPEAKER_00: going yes it does well the biggest news that came out in the last couple of days jason i think definitely

SPEAKER_08: was the combination of x and xai um two private companies one social media less talked about category for startups in the last i don't know 10 years and then of course the other hand is the ai company which is all we've been talking about for a while i thought it would be good to just touch on this the mechanics a little bit and um i think people might be curious about an all-stock deal between two companies and how valuations are are kind of sorted out now here we do have kind of one person and the same collection of investors taking two companies that they've owned and putting them together uh but the all-stock transaction jason to me just seemed like a great way to get these two companies brought together quickly and uh without excess faf on the uh on the transfer of money side between individual investors uh for folks who don't know elon musk who owns both companies said over on x that xai has acquired x so the ai company is buying the company formerly known as twitter and the deal values xai the ai company at 33 billion so essentially 45 billion minus debt jason your first

SPEAKER_58: thoughts yeah i mean we knew this was going to happen i predicted it on the show that we would start to see ai companies by content companies so if you were sam altman looking at this why not buy reddit i'm

SPEAKER_12: not sure reddit's market cap right now it's probably 15 billion i know it had peaked and it was i think it went public at seven or eight billion and i said back then why hasn't chat gpt gemini clawed with these sky high valuations just gone on a purchasing spree they should buy quora and they should buy reddit and then make it unique to that platform yes when you are using xai or using x.com formerly known

SPEAKER_02: as twitter and you hit that rock button and it gives you context my lord it is a great experience i i frequently will come across some term i don't know somebody's tweeting about something i don't know any of the context click on that button get the context having that real-time data and then blocking that real-time data from competitors is going to be a massive advantage to x dot ai yeah so it's a great uh yeah it's a great combination in terms of the mechanics of taking

SPEAKER_58: two private companies and putting them together there's a drag along feature a certain number of shareholders have to vote for something and then everybody gets dragged along so i think once you

SPEAKER_02: hit and it could be different for every company because it's in the the sort of bylaws of the

SPEAKER_58: company that everybody agrees to when you get 60 70 80 percent of people to agree then the companies

SPEAKER_02: can merge and the 20 of people who don't sign off or don't agree well they signed an agreement that these kind of transactions are subject to the majority wanting to do it so obviously the majority wanted to do it in both cases and um i think this just locks in xai as a top call it three or four

SPEAKER_12: player in the marketplace instantly right there'll be top three player in the market instantly this

SPEAKER_48: is the power of m a and this speaks to the end of the wrath of lena khan all right founders let's

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SPEAKER_12: of private market transactions come up on the radar of the government typically anyway because there's no public company involved in such a fragmented market but i do think we're going to just see m a m a m a and i talked about mid-market m a countless times in the last year that that would be the big win because when you have mid-market companies merge what do they do they challenge the max seven so this is great this is exactly what i was thinking you know reddit getting bought by chat gpt quora and reddit merging and then creating a chat gpt competitor even better this is what you want to see in the market doordash and uber merging or you know amazon spitting out zooks and merging it with uber or lyft you know some combination of those will make for you know 250 to 500 billion dollar companies with real revenue and it's just great for investors as well because now the investors in each of these companies have a greater chance of success they wouldn't have voted for it if it wouldn't increase the chances of success so that's what you have to think what's going through their minds and i guess they just didn't want to have the the fair market value that twitter went through go down when it got purchased right for 44 billion and then xai has been on a chair and the way you value these things is what are

SPEAKER_58: they able to raise money at and i think they said x.com was raising money at the previous valuation so probably what happened was you had money being raised at certain valuations if the market says those valuations make sense 80 and 45 billion or whatever it is you put those two together the

SPEAKER_79: market has said the market participants have pinned them at those numbers and then it's a go right

SPEAKER_08: everybody feels comfortable with it i think also an important thing to keep in mind here is how the companies were already operating almost as a conjoined entity i mean having grok on x makes perfect sense if you think about them both from the perspective of musk but yeah they were distinct companies so to see that kind of tight integration super interesting clearly xai wants a distribution mechanism and a data source x supplies both but um actually i was paying part of x's bills because

SPEAKER_84: xai was able to raise more money more recently than x has been so that would be for servers you're saying they were paying its servers or something i think actually i was the reporting was helping it stay current on its bills so it could have been as much as helping it service the debt um so this

SPEAKER_12: is another interesting wrinkle in all of this if the other thing to look at is the downside if you don't do this what's the impact on both companies well meta is going all in on using their customers and their community's data to inform llama i would think right like meta now has an ai search box so if you're using instagram or facebook they kind of force you to use it if you even if you don't want to

SPEAKER_48: yep so then that means for xai claude or any any other independent language model if you don't have a social network to feed you real-time news you're at a disadvantage i mean this is i hate to keep

SPEAKER_08: bringing up the same couple of talks from the liquidity summit last april but like i think it was uh antonio grassis who said like look x has a unique data source in the world that's why his company was back in xai and so like i i do think that x by itself had a relatively low ceiling for how

SPEAKER_24: much it could become worth because i think snaps trading has something like three times sales jason going back to your price sales ratios but ai companies can be valued at but jillions of dollars

SPEAKER_08: so there's a lot of good stuff here i'm curious to see how much enterprise adoption grok gets because when we think about the two the leading model companies in the u.s grok's models are often up towards the top of you know llm arena and all those other ranking lists but i don't hear about as

SPEAKER_02: many companies using them in production jason yeah i don't know that they have really pushed their

SPEAKER_12: enterprise efforts i think that's something that maybe chat gpt has been way ahead of since sam

SPEAKER_79: worked with the startup community at yc and comes from that sort of yeah space so it's a 33 billion

SPEAKER_06: dollar deal essentially for x which means that it has surpassed the 32 billion dollars that wiz sold for bringing us another pretty enormous deal sure it's all stock sure it's elon's companies but like i don't know we wanted more m a we wanted to see more dollars in flight well here you go yeah

SPEAKER_79: i retweeted i saw somebody had a chart uh about m a so far this year yes which i guess is from cb insights or charter and uh we're at 54 billion for q1 last q1 we were at uh two or three billion q1 before that two or three billion q1 before that we had a must have had something big in 2022 that was 38 billion so you know this chart kind of speaks volumes we're going to have at least in the last four years a record first quarter by yeah looks like 50 almost so this is trouncing 23 and 24 and

SPEAKER_08: greatly exceeding yeah i i think the important thing to keep here is that sure it's fun to see the x deal be worth slightly more than the uh the whiz sale but the whiz deal was a pure startup play it was a venture-backed upstart company from this really tech scene that had a lot of you know private capital into it you love to see it whereas x had also like some saudi money and it was slightly less venture and more private market so i think the whiz deal is full we should just take all of it as a yes in that chart so i love that data point yeah enough jason to actually change the the tune amongst

SPEAKER_24: venture capitalists regarding liquidity or just a good taste to start the feast there were a lot of vcs in

SPEAKER_10: uh x.com i believe sequoia and some other ones joe lonsdale so they're all gonna be now in xai i think

SPEAKER_12: that's a nice update to send to your lps so in a private market transaction being able to say like hey look and we had a social media investment that's now an ai plus social media investment that's awesome what this also does for freedom of speech and you know uh all the challenges that x has had with

SPEAKER_79: advertising this now eliminates that business model for because you have the business model people

SPEAKER_109: paying 20 or 30 bucks a month for grok so this is one of the you know if you double click on this a

SPEAKER_12: bit one of the great things that could come out of the large language model era of consumers paying 20 30 40 bucks a month you know and executives paying that amount for a large language model is some amount of that could go towards content creation and will so we've already had the you know people who are doing reinforcement training but now why not just buy the new york times why not buy the new york post why not buy vox like vox's value has always been like i think they probably haven't increased

SPEAKER_79: in value in five or six years probably no and then we see like you know yahoo's selling tech crunch for spare parts and it's becoming it's probably going to be like an seo play it's kind of like the end of the the brand in my mind if it's going to be part of like the pc mag ziff davis diaspora all of this

SPEAKER_112: means there is actually a viable future for content if you can get a language model to say you know what

SPEAKER_114: hiring 30 journalists to work on tech crunch and feeding that to the llm okay that's only 5 million a year for the whole group and their office space or whatever yeah seems de minimis to me so content as

SPEAKER_112: a front for llms is a really interesting idea what if like tech crunch were to break even while feeding if you bought the vox you know uh collection of sites or penske's collection of sites all of those

SPEAKER_20: collections of sites could actually wind up being worth something to a large language model all right

SPEAKER_118: i'm gonna i'm gonna throw something out there you love talking about uber and doordash kind of

SPEAKER_00: joining up all right instead of paying for reddit which by the way 18.8 billion today so what 25 to

SPEAKER_02: take it off the table probably jason yeah you got a 30 premium when you take a company yeah maybe even

SPEAKER_03: 50 sometimes because it it spikes when the rumor comes out and then you have to beat that number after

SPEAKER_06: it yeah so call it 22 add on another 3 billion short or or you could buy substack right but yeah no

SPEAKER_08: everyone's gonna freak out oh my god don't train against my data so here's what you do you buy substack and then you tell everyone you can keep your current deal with substack no training off your data we're taking a 10 cut but if you let us train off of your substack no cut at all yeah or how

SPEAKER_10: about if you let us train against it we'll give you a hundred and ten percent of whatever your subscription revenue is so you got a million subscription revenue we'll we'll give you a

SPEAKER_12: hundred k on top of it if you publish on this regular schedule and we like your content so yeah

SPEAKER_58: that's a great idea so this is one of the great things about m a becoming vibrant and this is where regulation kills innovation you start thinking about like gosh i wonder what doordash is trading at price

SPEAKER_12: to sales it's probably like low single digits four or five six percent right and then what is a self-driving company like waymo trading for what is uber trading for these things are probably trading for you know airbnb three four or five times their revenue if they're trading for three or four times

SPEAKER_112: their revenue man somebody with a waymo valuation could come in and be like hey waymo plus doordash and uber equals the winner trillion dollar company whereas the three of them together might be worth 250 million yep you put those three companies together i think their value doubles or triples immediately

SPEAKER_58: because the market would give them a premium for winning the market okay so this is really

SPEAKER_06: interesting actually i know this is not a public market show so we'll keep it short but

SPEAKER_08: doordash's current price sales ratio is 7.3 whereas airbnb's is seven so they're very very close

SPEAKER_00: actually in terms of how the market has ended up netting them out in terms of a revenue multiple uber by the way a little bit lower uh 3.6 but that's still yeah that's a lot lower yeah yeah i'm

SPEAKER_02: just trying to think about if i agree with that's the self-driving hand-wringing if the self-driving question got answered definitively it would spring back up to seven so i think that's all you're

SPEAKER_12: seeing there is people are like okay are cybercabs and waymos going to how quickly could those

SPEAKER_135: possibly be rolled out and what impact would it have yeah well what's amazing is at uber's three and

SPEAKER_08: a half x price sales trailing by the way uh the company is still worth 150 billion so if there is a 2x hiding in there jason it's not just a billion two dollars it's 150 billion dollars which is an

SPEAKER_135: enormous sum yeah that's what it should be actually i think that's you know listen i'm speaking my own book here i have exposure to doordash as well by the way so it's not like i'm complete and i have exposure to waymo because i'm a google shareholder so i have exposure to all of them i do think this is

SPEAKER_79: the era of m a that's going to be really interesting is just let people under 250 billion merge with each other create better products and services america wins you know salute i'm here for

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SPEAKER_08: stablecoin we've had uh jeremy allure on the show a bunch we have heard that this company's going to go public back in 2021 and 22 via spac no filed privately to go public last year we waited nothing happened well fortune reports jason that circle is now going to work with jp morgan chase and city on its long expected ipo thank god timing not entirely clear right now but circle and i'm going to quote here quote aims to publicly file paperwork for the offering in late april so that means we're less than a month away from finally getting our admits on circles public s1 filing two things to keep in mind you're just in one crypto is enjoying a a deregulatory spring you might say people are being forgiven charges are being dropped cases are being left behind that's good the other thing is we've been talking about the stablecoin boom here on twist every month for as long as i can recall and so i think right now the market is hot for exactly this type of company looking towards the future of finance so even though the market's choppy right now i think it's a great time to list i think this is the right

SPEAKER_02: time it's a perfect timing for them they are a trusted audited us-based i don't have any exposure

SPEAKER_12: with the name so just to be clear like i'm not talking in my book or anything here and jeremy muller is you know a serial entrepreneur who's well known there is something called the genius act which

SPEAKER_112: you'll be hearing a lot more about the question is who will be able to create stable coins in the us this is going to become the big question when this stable coin act gets initiated if it happens um we're going to need to look at should tether be allowed to service american companies or go public here i don't think tether should be even allowed to buy treasuries now i know that's a controversial

SPEAKER_12: statement but if they have a sordid task where they've been banned in many regions and people have

SPEAKER_163: all these claims of you know the attestation as opposed to an audit if you are going to have billions of dollars of treasuries and you're going to allow people to magically move money around i'm going to go with let's make sure that this operation is extremely tight tight is right and so

SPEAKER_12: financial markets should not allow this is my personal belief outside actors to operate at scale in markets that should require audits so this is going to become i'm just giving you like a little heads up of what we'll be hearing people talk about in the coming months it's going to be uh whatever world liberties stable coin circle stable coin all the domesticated ones all the ones that are audited and above board maybe uh even stripe will you know instead of just having that pool for them will

SPEAKER_114: have their own um is robin hood and coinbase both of them are going to have stable coins or not i'm not

SPEAKER_08: sure coinbase is very close with circle and usdc it's kind of their house stable coin if you will so

SPEAKER_12: i don't think they're okay so um you know i did a tweet about this the other day you know in the tether truthers who you know believe there are some shenanigans going on with this company and then the tether long people which i don't know how you're a long tether of it all just equals a dollar yep you know these companies are going to need to be regulated and taxed um or uh have audits they don't have audits at tether i think they have attestations or if they call them audits i'm not sure we would consider them audits to the you know definition of american companies and this stuff all needs to be on shored

SPEAKER_163: and the companies need to be registered here you should not have people introducing financial devices

SPEAKER_12: in this market back to tariffs there should be a massive tariff on anybody who wants to bring a financial product into the us that's not you know a us-based company and that's not a us-based company as best as i can tell so get ready for a big showdown so the genius act is the guiding and

SPEAKER_08: establishing national innovation for us stable coins of 2025 act okay so there you go i've not read this jason but i will now that you brought it up to me is this coming up in your conversations that

SPEAKER_179: you're having i just hear people buzzing about stable coins a whole bunch so i won't uh you know

SPEAKER_114: i won't get into it too much but people see stable coins as a massive opportunity because

SPEAKER_12: when you buy a stable coin if you buy ten thousand dollars in stable coins and you just hold them i'm making the interest on your stable coin so i'm making the five percent on your stable coin so you're

SPEAKER_58: giving me 500 a year for being your custodian okay seems fair but if you have a billion in stable coins

SPEAKER_12: and you're like some you know giant uh company like coinbase let's say they let's say coinbase

SPEAKER_184: kept a billion stable coins uh-huh should coinbase be giving 50 million a year to somebody for that

SPEAKER_186: or should they create their own yeah i think they actually create their own i mean yeah the number of

SPEAKER_43: stable coins out there of scale is not that high i have a chart here jason i'll just throw up on the video for everybody who's watching this is a chart from the block they have a great data service showing uh kind of the current scale of stable coins there's two main players there's tether and then there's usdc but if you look at the top of the chart the tether is blue

SPEAKER_121: usdt and they have how much about 145 billion dollars wow so 145 billion five percent of that it's an insanely good business but it is it is dependent on interest rates so essentially you

SPEAKER_08: could think about the value of circles business being its net interest margin which is predicated on essentially tight monetary policy the looser the fed gets probably the less profitable it goes down

SPEAKER_52: to two percent two percent of a hundred billion is two billion dollars a year and this is where tether

SPEAKER_163: there were all these claims against tether because tether wasn't showing where the money was and that they might have had chinese paper as in private uh loans to chinese real estate companies that was always the big rumor maybe they cleaned it up maybe it never happened nobody knows because you don't have ernst and young or kpmg or some notable firm here in the u.s signing off on it but they were probably getting paid 15 on that chinese paper they at some point wouldn't say if they had chinese paper then they said they didn't so what i read into got rid of it cleaned it up maybe uh maybe cleaned it

SPEAKER_20: up but if they were making 15 on a hundred million 15 billion and they have been making claims like a public company quarterly in you know and they're on twitter but they're all in different weird

SPEAKER_12: jurisdictions that's the other thing that you know coffeezilla and other folks who have investigating it there's a uh a tether person on twitter i forgot his name i had him on the program no paulo is like

SPEAKER_140: is he the cto or something he's one of the bosses yeah yeah he's one of the top five or something

SPEAKER_12: no there is a anti-tether person who has been investigating them for a long time and this kid's been like deep into it he's part of that tethered truth truther i've seen him in my ads yeah yeah so he's you know like they basically have been really studying like where are these people based and

SPEAKER_58: like they went into like their previous companies and like a lot of people in crypto uh colorful

SPEAKER_73: backgrounds colorful companies color backgrounds you know different interesting things they did

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SPEAKER_08: slightly more generous take now on crypto people and it's because i've been playing a little bit more poker lately than i had been before and i just realized that the crypto crowd is just the poker

SPEAKER_208: community with the keyboard i mean there's something to that yeah well there's a lot of that there's a lot

SPEAKER_12: of people in it who are actually anarchists there are people in it who are libertarians there are

SPEAKER_163: people in it who believe like you know the the state shouldn't be involved in currency they don't

SPEAKER_12: believe there should be speed limits you know all this kind of stuff so and then there's the big cleanup so i think what's happening in crypto is the big cleanup and circle going public will be part of the

SPEAKER_163: big cleanup where it's like we're going to replace the players who are below board or who aren't doing the proper dotting the t's and crossing the t's and dotting the i's we're just going to replace those

SPEAKER_58: folks over time in this administration with people who are above board and so that's the opportunity

SPEAKER_12: is to be an above board player and it's going to increase people buying treasuries which is one of the things this administration has a concern about so stable coins i think tether is one of the largest buyers of treasuries right now if that was a house of cards let's say like there's a one percent chance that tethered true truthers you know are correct or a point one percent chance you know it's

SPEAKER_58: like pull a card out of a deck and let's see if this thing crashes or has problems what would happen

SPEAKER_92: to one of the large buyers of treasuries well it dries up but also they dump and so there's a there's a

SPEAKER_08: flooding of the of the market and that breaks the you know supply demand balance and then lowers prices uh jason just to kind of back up what you said in its 2024 kind of report if you will tether said that it had 13 billion dollars in profits i mean that's unbelievable that is a staggering amount of money i i hope by the way that all the concerns here are overblown i agree with you on the need to

SPEAKER_06: be regulated but holy crap that's a profitable business you want to kill tether you want to just

SPEAKER_12: totally annihilate the company in 10 seconds very simple circle says if you own usdc you get 80 percent of the interest that we get passed through so basically every year for every x number

SPEAKER_112: of circles you have we'll issue you another one because of the interest yeah and we'll take 20

SPEAKER_58: of that so if we're making five percent we'll take a point you take four that's the end of tether

SPEAKER_12: boom and you know what if you're second to tether in the market right now why wouldn't you do something aggressive like that you know it's kind of like robin hood if you move your money into robin hood they give you this incredible bonus you have to keep it there for a couple years like maybe you have to keep it for three four or five years but they'll give you like some two percent three percent bonus for moving your money from i don't know goldman morgan fidelity whatever to them wow that's kind of interesting and aggressive so and those kind of things have always existed but it doesn't exist

SPEAKER_163: in stable coins it's kind of nuts that people use these stable coins and don't get the interest on their money so somebody out there will launch just somebody out they should launch a stable coin

SPEAKER_12: that distributes the money to the people who own it minus a vid a reasonable thing crypto rewards and

SPEAKER_08: i know there's some there's some nuance here with coinbase that i'm sure that i've forgotten the details of but no one's being that aggressive i do think though that as circle tries to go public it's probably not going to be working on new ways to give away 80 percent of its revenue but if i was someone who wanted to take down signal and tether sorry circle and tether my bad uh then i think that would be a great way to go about it i i will say it's going to be one hell of an ipo let's go isn't

SPEAKER_02: it good to be excited again about debuts jason that's great the thing i would encourage everybody to look at is also anti-money laundering and um terrorism human trafficking those three should be looked at deeply

SPEAKER_184: with any offshore stable coins if they don't have those and i think you know the thing about this

SPEAKER_112: genius act really great name um yeah i love the way they name these things um i would say we should have incredibly high requirements around anti-terrorism money laundering human trafficking if you get caught with your stable coin not doing kyc not having really tight controls i think it should be banned

SPEAKER_12: so i think tether if the goj and some of the investigations are in fact correct i think they would be banned day one not allowed day one and i think that would be the right decision for this administration to make i'll make a prediction i think this administration is going to have to make a difficult decision here because howard litnik is involved with tether yep world liberty financial is onshore circle is onshore we've got a lot of people here who are in and around this

SPEAKER_20: administration and family who have exposure to stable coins and then you have this genius act who's

SPEAKER_121: who's putting the genius act up mr haggarty and mr scott of south carolina on the senate and then also gillibrand and lummis so four senators two from each side of the aisle so let's see let's see what their

SPEAKER_135: donations are how they're conflicted where this is all coming from so i think you know we'll maybe put that on the docket for wednesday is to double click on all this all right uh elsewhere in ipo land

SPEAKER_08: just very briefly for everyone out there who cares about equities jason service systems the maker of massive chips for ai inference associated with g42 and that ai push in the middle east um has tinkered with this uh ipo now the g42 company is going to purchase stock in it that will not have votes and therefore it's not going to run afoul of the committee on foreign investment in the us and reporting says that the ipo is going to go ahead love to hear that uh core weave went public last friday we talked about it live on the show how did it do well it was about flat on its first day and right as we were starting this show it was down about 8.8 percent and it's now down 9.5 so the stock market is selling off today but a pretty crappy day for core weave uh to endure so that's not so good

SPEAKER_12: it means that they top ticked their sale remember when they sell their shares you want to get the highest price possible having a bump on your ipo might feel good uh emotionally but if it's terrible

SPEAKER_58: for shareholders if the stock were to double on the first day it means you sold a bunch of shares at half off here they sold their shares at a 10 premium so good for them they got 10 more than the shares are fair market value so the shareholders now have to make up that 10 but they get to deploy that capital and uh do interesting things with it and then they got a free 10 cents on the dollar yeah

SPEAKER_08: they're gonna pay off some of their debt they're gonna keep investing and growing i i don't think it's the you know the end of the world when a company's ipo doesn't go quite as planned but we do hear a lot about people leaving money on the table well here's the opposite they stole the table when they went public good for them finally etoro don't forget has filed to go public stub hub has filed to go public and if you care about niche media in the united states newsmax went out with a reg a plus listing which is very interesting i just got to look into this a little bit jason clearly going public on the back of an election cycle which is good for politically uh changed news

SPEAKER_43: uh but always fun to see more companies getting out we love seeing more total public companies

SPEAKER_79: so that is the rundown there reggae is basically you can offer up to 75 million it's incredibly

SPEAKER_163: expensive if you don't hit tens of millions of dollars because you have to start filing and ah okay do a little bit more reporting so generally it works for people who have a good relationship with the with their customer base and their customer base wants to invest in it uh reggae is it's kind of needs it's one of these things that if we could allow an accreditation test you wouldn't need reggae uh and so it's it's kind of like gosh how do i say it it's kind of like split the baby between public

SPEAKER_112: offerings and private offerings and it just doesn't work as smoothly as it should i mean i feel like

SPEAKER_08: that's also true about specs and so my my immediate vibe when i saw this was because it just seems like kicking open the back door to go around to the front of the building it feels like an unnecessary complication on a thing that already works for companies that are mature and ready to go public

SPEAKER_114: i've always felt like spax and i said this at the time uh because a couple of my friends a lot of my friends were doing them uh and uh i always felt like those were dipping down into being an aggressive vc

SPEAKER_163: betting on crazy things and if you're a vc and you're betting on crazy things you're expecting 60 70 to go to zero we're not return capital yeah and you're expecting your returns to be in the one in ten so if you were to look at spax through the lens of a venture capitalist if one in ten performs greater than 10x over you know some period of time it was worth doing if they don't you know and and you're buying only one or two specs as a retail investor that's the problem you know like joby is this flying car company and uh i you know some of my friends were investors in it like sky date and

SPEAKER_112: et cetera always had an affinity for that company one of our companies desktop metal when public 3d printing it was desktop metal was worth over a billion dollars in private markets it's worth 150

SPEAKER_12: or 250 million 164 yeah it's like it's worth 85 less joby would be worth 10 20 maybe worth 20 billion as a private company i don't know what it's worth as a 4.7 so it's it's also 75 off the

SPEAKER_58: public markets don't know how to do deep tech crazy hail mary you know binary outcomes and i think that's the lesson of spax is retail investors are looking at quarterly reports they're not taking a

SPEAKER_12: five-year view of these things of what if it works i also think didn't one of the um i think one a a couple of actually maybe more than one of the quantum computing startups went public so you start

SPEAKER_58: going public with flying cars space tourism 3d printing yeah and quantum computing this is like high risk investing folks those are the things that's back and i think the people who took them out i mean i think the ceos of those companies are probably sitting there going you know maybe

SPEAKER_08: should have been private maybe should have stayed private quantum si i believe went out with us back and it's currently worth uh 220 jason and uh it's worth a dollar 20 shared down from an all-time high of over 20. so another similar kind of story of 95 off yeah we're 95 off the p and that's the other

SPEAKER_58: problem is people go oh quantum computing i'll give it a premium this is the naivete of a retail investor i'm super realistic nine out of ten companies go to zero doesn't change my pulse i go to those founders didn't work out what do you got next because i know that every 100 companies or so i'm gonna hit a robin hood or a you know a calm or a grin or some company that's gonna pay off 50 100 200 to one and then you know what if i hit an uber and it does 5 000 to one what if i hit a robin and it does three four 500 to one you you can really make up for a lot of zeros the the retail investors started

SPEAKER_163: to think well of course it's going to be worth a hundred times this because it's deep tech they didn't realize is one out of a hundred of them might become worth a thousand x or 500 x yeah sure that's

SPEAKER_112: possible maybe it's even probable but you only made one bet yeah or you made three bets you don't

SPEAKER_24: have enough surface area to hit one this i mean accredited investors sophisticated folks let them

SPEAKER_08: play keep the people who don't know what they're doing out you and i are on the same page here just a little bit frustrating to see history constantly repeating itself jason i want to move on to a segment that i'm very excited about because we have a a guest dropping in today so today for office hours we are going to meet with hayley harrington from hook hub they are building the airbnb for rv parking yes you can find them at hook hub.co on instagram at hookup rv or over on x at hook hub underscore rv

SPEAKER_24: uh please welcome to the program it's kaylee kaylee how you doing i'm great yeah it's good to see you

SPEAKER_164: again uh so you went through the launch accelerator uh which cohort 33 the most recent the most recent

Chamath Palihapitiya: one and uh before that did you happen to do founder university or did you come directly nope i did the university right before that awesome and we invested in you obviously for the accelerator i'm not sure

SPEAKER_270: if we did the founder university 25k bet did we not at the university but the accelerator yes did you uh

Chamath Palihapitiya: ask us for that bet did you uh request it and we said no or did we offer it and you said no i'm just

SPEAKER_265: curious no i actually didn't know it was an option for the universe or the yeah the university so this is

SPEAKER_52: alex the thing we're doing is sometimes we meet people who are pre-incorporation or they're just

SPEAKER_163: figuring it out and so you are airbnb uh for uh explain the pitch absolutely yes i'm the founder

SPEAKER_265: of hook hub we are airbnb for parking your rv so we're a marketplace where you rent out unused land

SPEAKER_278: space for rv parking got it so if i happen to have some land in the hill country in austin and i had a

SPEAKER_12: couple of spare acres people could come and park their rv there and i could charge them for doing so

SPEAKER_184: is this for people who want to live in the rv there or store the rv or both both yeah that's what we're

SPEAKER_12: all about is every form of rv parking got it and what are people's current choices to park their rvs

SPEAKER_265: so for short term there are a couple apps just vacation and there's rv parks but for long term there is no apps right now so pretty much people are going on google calling rv parks that's the

SPEAKER_52: option and uh this doesn't exist on something like airbnb they don't offer airby uh parking on airbnb

SPEAKER_58: no got it so you have to build up supply and you have to build up demand there are rv parks there must be marketplaces or directories of rb parks no there is yeah there's apps out there where you can

SPEAKER_12: just you know find locations of rv parks got it so what you provide is another option i can see here at 60 bucks a night to park an rv uh is that about right is that the average price in america

SPEAKER_265: what's the average price in america to park your rv yeah so actually depends on area it can range from 20 or 40 bucks a night up to 150. we do have lower rates when they stay longer but yeah just nightly

SPEAKER_58: tends to be higher does it need to have electrical hookups does it need to have internet does it need

SPEAKER_265: to have water hookups how does all that work so that's optional the host can list with no hookups and get bookings of course if you offer those you can charge quite a bit more so let me just back into

Chamath Palihapitiya: the math here if you were living the rv lifestyle and you needed a place to park in america for a month you would be what's the average monthly about 750 would be average yeah that's pretty dope if you think

SPEAKER_163: about it alex from a the perspective of like somebody who doesn't have a home they live in their mobile home for 10 000 a year they can basically park all around the country uh what do national

SPEAKER_265: parks charge for your rv parking i'm curious oh i haven't looked lately some of the rates are getting really high if you're just doing nightly there's like a hundred plus really so several times as much

SPEAKER_55: yeah yes so you could be spending three thousand dollars a month if you're parking in premium places

SPEAKER_163: oh yeah so it's not necessarily if people are thinking about van life which is another wrinkle to all of this there's a new category van life that i want to get into uh because i'm always following

SPEAKER_58: trends i'm like a trend guy and van life is different than rv life rv life a lot of boomers they're retired they decide hey i'm gonna go out for three months a year and instead of staying in hotels i like to have my stuff and i think a lot of it is socialization you get to meet people other retirees and you can go to cool places and it's kind of like um i don't know the it's kind of like a harley davidson yeah kind of like americana you know being on the road thing i i kind of dig that but tell me is van life playing any role here yet because that seems to be young people who are white collar workers digital workers knowledge workers who want to have their cake and eat it too they want to have the beautiful retirement but they might be on like a fire financial independence retire early kind of hybrid so that's another trend alex and i have been attracting so how does van life play into any of

SPEAKER_265: this if at all oh it definitely does shockingly it's almost half of the rv years now are the younger generation they're the 35 to 54 year old remote workers okay um so yeah we're it's every year it's getting larger um for the younger generation and tell me about that cohort because does that mean

SPEAKER_163: like the entire space has doubled or you're just getting a greater percentage of them and how many

SPEAKER_58: people in the united states let's say are living this lifestyle i don't know half of the time or more

SPEAKER_265: so it's 1.2 million americans are living full time um there is more when you consider the snowbirds you know doing the six month thing so the 1.2 million is just the 100 of the timer and so each year we are seeing growth still just overall in the rv market more people switching to that life for all ages but we are seeing the percentages based on age groups is shifting more

SPEAKER_43: and more to the younger so it's the opposite of the harley-davidson problem when their coverage

SPEAKER_08: customer gets a half year older every year you're going the other direction right jason just underscored the thing you're talking about in uh 2024 there were 310 000 rv wholesale shipments up six and a half percent from 23 so even in the post-covid world we're still seeing this track up over over time

SPEAKER_06: so it seems pretty bullish as an overall just market to sell into kaylee yes so how is the business

SPEAKER_164: going uh how is fundraising gone and uh any challenges you're having you're you know uh an early stage

SPEAKER_163: startup here uh maybe how's it going how's the traction where are you strong where do you need

SPEAKER_311: help yeah traction's good um so so that's good we're keep going off in the right about 20 to 30

SPEAKER_265: growth each month so things are looking good yeah yeah things are looking month over month growth is

SPEAKER_109: what we consider high growth yeah that means you're doubling every three months right yeah rule 72.

SPEAKER_265: yeah yeah so that's been good it's still we have a lot of challenges um as a small startup so fundraising has been difficult due to the fact that uh we're not in a sexy market you know everybody's looking at ai we're in the rv industry most people in the vc world don't really understand that industry

SPEAKER_58: got it okay so you have to educate them like we just did now we're uh cool hunters here alex and i so we understand van life and financial independence and we're tracking this kind of stuff so you have to educate vcs on the opportunity but there are vcs who love a good marketplace yeah right and have you been able to identify that subset and talk to them about hey here's the here's the vision and why this is worth the time is in amongst the people who understand marketplaces what's their objection is

SPEAKER_163: their objection they're unsure of the growth rate they think it's a small tam well tell me let's double

SPEAKER_58: click into that group of that subcategory of vcs the ones who get marketplaces like me yeah no you're

SPEAKER_265: exactly right so we've talked to a couple marketplaces investors and they're excited by the idea but it does come down to that they don't understand the market still they're unsure the growth potential they've told us that blatantly so i keep sending updates showing them you know the market well you know

SPEAKER_52: i think this is where uh maybe sharing the growth of the market and having a vibrant build in public

SPEAKER_163: or social media so have you gotten to the point of having a really tight social media designed around van life designed around featuring your customers featuring your hosts yet because that would for a lot of investors prove there's something there is you know tapping into the reddit the subreddits tapping into the instagram tag van life if i were to pull up your instagram right now would you be ashamed

SPEAKER_322: or would you be proud uh both i would be proud of the content but i just started i mean very recent

SPEAKER_265: so and i'm also getting a consultant i'm gonna call with later today and they're gonna help

SPEAKER_37: with our two-year strategy okay and i see you've got 600 followers there and you're just starting

SPEAKER_12: i'm gonna give you a piece of advice i believe that if you the founder of the company can master tick tock youtube shorts and instagram reels which is all the same thing if you can

SPEAKER_58: master it i think that you're going to solve maybe three or four problems all at once number one you're going to solve uh investors because they're going to go to your social media and they're going to start there and they're going to see oh my god there's a there there there are people interacting here number two you're going to solve supply because people if you start featuring your supply on your social media will want to be featured number three you're going to solve demand because people who are looking for supply are going to find it there right right and number four you could solve for um employees uh and team members who are you know the best team members for this startup are going to be people who love living in a van so if you found a marketing person who's a social media marketer who would join your team who lives in a van you could probably hire them for a thousand dollars a week probably the

SPEAKER_312: expectation of a social media manager who knows how to edit short videos who works remote might be 50

SPEAKER_112: or 60 or 70k that's probably their expectation and then if you told them here's your job i want you to go to each of our customers and take pictures of them and to go interview them and to make shorts out of them and then interview people who are also living the van lifestyle their brains would explode now you've got somebody who's living van life who gets to have a job geeking out about van life and that person's waiting for you at the van life tag on instagram or tiktok and they're already making these videos and when you come to them they're going to think hayley's an idiot she's going to pay me for what i'm already doing how do i know this because when i was running weblogs inc we hired a guy named ryan who was an incredible commenter and uh he would comment underneath peter rojas's ryan block would comment under peter rojas's uh posts and annoy him by fact checking him and he would write longer comments than

SPEAKER_163: peter rojas had written in the blog post so we said hey you're writing 12 comments a day how about we pay you 10 bucks to write you know five posts a day he was like are you an idiot and i met another kid who was doing apple blogs at the time blogging was not a paid pursuit we did the same thing with

SPEAKER_12: him and we created a blog called twa the unofficial apple web blog t-u-a-w and we got twa.com it was like a phenomenon for three or four years it was very popular blog and again somebody was

SPEAKER_58: writing about it on their tumblr and we hired them and they were like jake house an idiot and at that time we offered 250 a month to do 100 posts oh wow uh so it was three posts a day this was our first deal because people were doing it for free and people in fairness people were writing three sentence blog posts you know here's a cool video of somebody you know making doing something with their macbook pro

SPEAKER_112: i think that if you had my money and you said hey jay gal could i spend it on this i'd be like i

SPEAKER_342: wonder if that would be the best use of proceeds solving all those problems at once yeah that's a

SPEAKER_344: great point i've kind of i thought i'd be honest it's crossed my mind but i've never just went all

SPEAKER_271: in on that and i think it's time i just do that here's an experiment for you offer three different

SPEAKER_52: people you find one on tick tock one on instagram one on youtube a thousand dollars to do 10 videos over the next month and whichever one you like best i i love that i'm gonna do that

SPEAKER_12: and i'm gonna keep you updated on how it goes well i mean then you're and but you have to learn these

SPEAKER_350: techniques as well so as well so you have to you know be watching van life and say who does the best

SPEAKER_08: van life videos i just found this over on instagram this is the current uh rundown of how popular the van life and uh van life associated tags are van life diaries 2.8 million hashtag van life 17.8 million posts i had no idea kaylee that this was such a big deal i thought this was just jason and i

SPEAKER_55: dweebbing out about not having to pay property tax anymore yeah actually and so that observation

SPEAKER_58: alex very well done the the observation that you don't have to pay property tax you should make i kid you not a post a week on that one topic one of the things i learned about shorts is that you're not going after subscribers you're going after the algorithm so doing tax hacks or property tax now you can hijack property tax and tax optimization people there's a whole expatriate thing and leaving america or leaving your country to go to the people who treat you best on a tax basis that's a whole other genre and so there was a concept called news hacking which sometimes became distasteful people would be like here's my sas product talking about i don't know russia 9 11 9 11 russia's invasion of ukraine like you can do news hacking in a very dark bad way but there was news hacking of you know i am a security expert and andrew weiner's phone got hacked boom the day that hack happens we're sending a short

SPEAKER_163: article with five bullet points to a hundred journalists alex and i would get those what we're doing here is

SPEAKER_312: trend hacking we're doing tag hacking and the tag hacking and trend hacking you know subreddit hacking

SPEAKER_58: is a very powerful uh pursuit i wish you great luck with that any other problems or challenges

SPEAKER_265: i can help you with today well that was wonderful um but we are wondering too should i focus more on adding features for the user base or should i focus more on adding team members focused on growth kind of

SPEAKER_52: like you brought up you're currently growing 20 month over month which means you have product

SPEAKER_163: market fit and you apparently know how to find customers right so you could go crazy and try to grow 40 or 50 a month the only problem with that is you might not have the customer support you might get a low nps score etc and you're having a challenge with raising money you know not a challenge it's you know it's uh this is actually what you're experiencing is the normal process how many investor pitches have you done not just pitching to the people we introduce you to in the accelerator we introduce you to hundreds of investors you get to pitch them i'm talking about direct one-on-one

SPEAKER_270: zoom calls for 20 30 minutes with an investor how many of those have you done ballpark dozens

SPEAKER_312: four or five oh four or five okay great so i want you to add a zero to that and report back

SPEAKER_58: so that would be the much better thing is to take this segment share it with people hey i was just on you know uh this week in startups with alex and jason here's the clip here's the deep link uh we talked about a lot of the issues i was wondering you're a marketplace investor if i could talk to you about my business and get some great advice from you we're growing 20 a month so i don't want you to give your life story to them i was on this weekend we're we're a startup we're a marketplace i know you're a marketplace investor in these three other marketplaces we're growing 20 a month we're dealing with a lot of challenges because of that growth here's a link to me on with jcal and alex uh would love to get 20 minutes to get some advice from you about marketplaces so you're not asking for

SPEAKER_163: investment you're just asking for advice and you're sharing two bullet points two main points

SPEAKER_58: and you're going to try to say it in as short as least words as possible number one we're growing 20 a month we're growing 20 a month a month five words i was just on quest with jcal and alex eight words so you have two sentences one's five words one's eight words and there's a link in each and then would love to get 20 minutes of your advice since you're an investor in a b and c that's another 10 words so we've kept the email to under 50 words we've done it in three bullet points then i want you to ping

SPEAKER_181: the person if they don't respond every 72 hours moving this up to the top of your list moving this

SPEAKER_58: up to the top of your list moving this up to your top of list okay on the fourth one i want to say um don't mean to be annoying i just really uh respect your track record in marketplaces and that'll be

SPEAKER_112: the last one you do the fourth one ping one ping two ping three and then the fourth one i want you to say sorry to be a bother uh just i really could use your counsel since you have done so much great work in marketplaces is there anybody else at your firm i could do a first call with and then we'll let

SPEAKER_387: it go for now every three days you're going to be annoying how uncomfortable do you feel about those

SPEAKER_344: four follow-up emails i don't mean i didn't realize the follow-up that often i i like wait like a week

SPEAKER_270: and a half i had no idea i want you to create a sense of urgency so i want you to create 20 targets i want you to send 20 emails and i want you to follow up on them with a personalized follow-up

SPEAKER_112: jason moving to the top of your inbox enjoyed you on uh this other 20 minute vc podcast so you're

SPEAKER_163: kind of showing it's personalized it's not like a thing any chance i could get 15 minutes of your time from 6 a.m to midnight any day of the week saturday and sunday included right you're kind of what you want to do is show that you're not you're going to be relentless and you know what relentless founders is what we like to invest in so some there's some vcs who are like yeah i'll respond if they ping me two or three times or they go through somebody who knows me so okay i think you got a great growth rate i think mastering the social media piece with people because how many people full-time in the company now two three two full-time perfect the third person if they were somebody living van life would serve as a proof point you could have them get on the phone with investors they would serve as a ambassador they would serve as an sdr sales development rep they could warm up leads they

SPEAKER_58: could be a customer success because they visit somebody man if you were like the more i think about this idea of tapping a van life couple or an individual and it has to be somebody who's an

SPEAKER_163: extrovert so right you know somebody like presh who worked for me who i don't know if he's an extrovert actually but he plays an extrovert on social media he's out there building his products in person he's going for runs video taking himself yeah sharing his friends you need somebody high energy like that they might skew younger but they don't necessarily so they just have to skew that they're

SPEAKER_112: already doing the job paying somebody to do a job they're not doing already is hard you're kind of pulling teeth when i hired alex he was already doing podcasts and writing and geeking out about

SPEAKER_163: s1s i didn't have to be like alex read this s1 read this 10q he's like i'm sorry i can't talk right

SPEAKER_405: now i'm reading a 10q that's why i'm still at dinner parties or maybe he doesn't get invited to

SPEAKER_24: i want to jump in here though jason uh this employee this number three this van life sdr ambassador or content creator how much equity should a startup give to an early pig hire who's

David Friedberg: a non-founder i think this comes up a lot and while we're here let's take a moment you can give them

SPEAKER_12: a point if they stick around for four years one point okay that's great be generous it'd be generous right you could be generous with the third employee um now if they were the cto and they were joining

SPEAKER_112: and they had done two other marketplace startups they probably asked for five percent ten percent oh wow

SPEAKER_58: if they were getting like less than market salary so let's say the cto who worked at another

SPEAKER_163: marketplace not airbnb obviously but you know maybe they did work at airbnb and were one of the first 50 employees they made a little bit of money they may not want a you know 150k 250k salary as a cto they may want to take a 100k salary or a 5k a month draw you know 60k a year they might want to

SPEAKER_58: invest 250k you know to own five percent of the company at a five million dollar valuation and get five percent equity you know over five years and get to like a 10 ownership position so that's what you're kind of dialing in here this person probably doesn't care about the equity i'll be totally honest if it's a van life person what and they're optimizing for fire they would look at the equity as icing on the cake so you could probably get away with 25 50 75 basis points or a point if they're savvy they might want two points and they could if they were like chief marketing officer cmo level alex to your

SPEAKER_112: point yeah a chief marketing officer might ask for two points three points four points um and then here's the great news they're on a one-year cliff hayley if they suck or if you suck conversely and they

SPEAKER_163: don't want to waste any more time because they don't think that you are going to make this happen

SPEAKER_112: and the equities and gruesome they quit you quit them uh or if you can't quit each other that means

SPEAKER_12: something good's happened and they get that nice 20 25 of their equity you know on 12 months in one day so we've built that protection into startups it's called the cliff and the cliff exists for a reason i

SPEAKER_06: think this is fantastic if you want to learn more like i said it's hook hub dot co launch accelerator

SPEAKER_08: class 33 kaylee thank you thank you guys it'll be interesting to see if in time then life becomes so big thanks to things like starlink and project kuiper and so forth that people do kind of do the mass airbnb strategy but for rv spaces i can see that becoming a small business anyways i think the company is great i'm curious about their splits though i didn't get a chance to ask that but i wonder if they have like airbnb level revenue splits with hosts we'll see over time all right so this is

David Friedberg: a clip from andrew reid he was on i believe it's the tech uh bros podcast oh yeah tech bros they they're the ones who like do like the espn thing where they put the logos of the sponsors along the

SPEAKER_24: bottom yep so here is andrew reid from sequoia on the podcast talking about how the sequoia partnership works and how founders interact with it and how they get sometimes surprised here we go well i hear often

SPEAKER_428: like oh sequoia i've heard it's really tough internally like really sharp elbowed the stakes are

SPEAKER_429: really high it's a small team expectations on performance are insane it's a consensus investment

SPEAKER_431: process as well where you you don't need to just basically close you you got to close if you're an entrepreneur you got to close all your partners correct exactly and the part you know the partner

SPEAKER_432: meeting i've seen some founders really rise to the occasion in the sequoia partner meeting room i've

SPEAKER_429: seen people just totally wilt it's actually an amazing culture inside the building because of that i think like because the expectations are so high the team is so small right i think like this is one of the things that you know doug has this presentation he calls it the laws of physics where one of the laws of physics is that fund returns are inversely proportional to team size and also fund returns inversely proportional to fund size you know we've been very disciplined about keeping the number of people on the team and keeping the funds to like a relatively stable size and then working

SPEAKER_318: together to kick ass all right yeah great clip uh that rings true uh having pitched the the uh sequoia

SPEAKER_12: partnership having them uh invest in one of my companies uh you know that i ran as ceo and spending time with them and um you know them being an lp in my funds uh and me being an lp in their funds i've

SPEAKER_112: got a great deep relationship with them it is true the two important points there that doug leone the goat uh points out if you have too many people fund returns go down if your fund size is too high fund returns go down sequoia is a large organization but they have a seed fund and you know like series a they have a growth fund they keep the teams small high expectation culture and i do remember at one point going into a sequoia meeting i was like hey where's blind and they're like oh yeah he um wasn't invited back to the next fund which is how you get fired as a venture capitalist no you don't get

SPEAKER_438: fired you were not invited into the next fund so you nailed it it's like and you know that's it

SPEAKER_163: that's just the nature of the business is um you do get a lot of runway but then you might not be invited back to the next fund if you don't hit the notes that you need to hit yes the end now jason on

SPEAKER_08: the on the pitching point of this founders wilting founders rising to the occasion uh what does a

SPEAKER_06: a sequoia partner meeting feel like it sounds like they're all there at once and you're pitching literally all the partners for the fund that you're looking at i would say big ears small mouth is how

SPEAKER_163: i would describe pitching them they are not going to say a lot uh you might get one or two questions

SPEAKER_58: from one or two people and then they will follow up and i think you know they are looking for a certain archetypal founder okay or founders now a great market size great early execution track record those

SPEAKER_163: things can play into you know any of this you know in terms of decision making but you know they're

SPEAKER_438: looking for very specific you know peter thiel elon chad hurley max levchin you know go down the line of you know intense founders who are super driven reid hoffman you know i'm going through the logos in

SPEAKER_270: my mind steve jobs the cisco founders uh back in the day so they're looking for highly driven tankerous chip on their shoulder hardcore founders and i think because they have such a high number of people applying that they probably are okay leaving some good investments to other firms and going for the great going for the larry and sergey uh drew from dropbox yeah they're looking for really hardcore folks and you know what hardcore folks also myself sam altman probably didn't get great returns for them but still hardcore folks who they identify who they know have a certain amount of pride and doggedness

SPEAKER_438: they don't expect every investment to work out but they do want you know tony shea in the building you know they're alfred lynn you know who's now a partner there or ruloff was on paypal they're looking

SPEAKER_58: for hard driving chip on the shoulder entrepreneurs and so having a bit of a chip on your shoulder probably

SPEAKER_438: is an asset zuckerberg famously showed up to pitch them in pajamas and did a whole pitch of why they shouldn't invest you know that kind of stuff um as stones well i mean it was also put up to it by sean

SPEAKER_163: parker but the the whole um the whole four quadrant thing that don valentine said there famously competent incompetent uh can you know easy to get along with difficult to get along with or sometimes

SPEAKER_270: difficult or challenging individuals highly competent challenging intervene individuals are the outliers in our business so you know pick somebody travis elon you know that may not be easy

SPEAKER_112: to get along with at times but they're highly highly capable that's what you're looking for that doesn't

SPEAKER_438: mean you know you have to be difficult in every decision but sometimes that is a flag and you know

SPEAKER_163: we have that sometimes sometimes we'll have somebody who comes to the accelerator like we you know have people here come on office hours you meet them um and they want to make five changes to the standard documents and we're like yeah we don't for the accelerator we don't do that but for a direct

SPEAKER_270: investment we very mel very well might change some standard documentation because okay you know we we

SPEAKER_12: generally will advise them like these are the standard docs you're gonna make it more difficult for you the next time right so you know we suggest you do that but if they want to have in there that they can

SPEAKER_163: you know keep running or be on the board of this other company or they want to be an advisor to this venture firm you know raul has a venture firm he set up not that we were like he didn't have that when

SPEAKER_79: we invested but if somebody like raul was like i also want to do this venture firm with my brother or whatever my friend and i you know uh that's you know uh you know uh a no-go if i can't spend five

SPEAKER_08: hours a week on it i'd be like okay fine right uh sure sorry josh wolf from uh lux capital says chips on shoulders puts chips in pockets i think is his summary of this crib different sequoia yeah true

SPEAKER_24: yeah but i i uh can i just say there's a there's a little note of uh of shade in what andrew is

SPEAKER_121: saying there because if i think about who's raising the largest funds he's talking about

SPEAKER_312: interest in horowitz yeah yeah yeah i think all of those funds are going for the average venture

SPEAKER_467: returns and so what you'll see capital yeah yeah i mean it lets the the average venture return should

SPEAKER_58: be double the public markets if that does or even if it's 50 percent on the public markets and you're mark and treason and ben horowitz and you index the entire space and you're putting 2 billion 3 billion to work a year and you've got 20 billion under management you know what the management fees are on that it's just a money printing machine so that is a strategy to be essentially vanguard funds

SPEAKER_12: of venture sure in a way y combinator and what i'm doing at launch they're doing 500 investments a

SPEAKER_445: year in the their accelerator i'm doing 100 we'll probably get to 200 in our next fund that in a way

SPEAKER_163: is taking precede or seed and making an index of those well it turns out the preceded seed index if you actually succeeded in that and you indexed it you would be the greatest fund of all time because

SPEAKER_12: they typically do 2x what venture does so you might actually be able to establish a 3x fund 4x fund like that would be or three and a half that would be pretty juicy so you know there you have it

SPEAKER_163: folks if you could if you could institutionalize a 20 year over year return uh and you can keep making

SPEAKER_09: the number go up pretty great yeah warren buffett will be calling you at that point in time because that would be yeah but you get no liquidity right so that's what you're giving up right so if you

SPEAKER_163: get the vanguard fund and an average is seven or eight percent and or like whatever if it's a tech fund it does eight or nine percent like and you can come in and out of it as you please that's a feature

SPEAKER_12: in venture you can't and in venture you have to have a group of people who get the allocations from 10 different people so that you're in 10 different seed funds and that's what a fund to fund is for

SPEAKER_438: right so there are fun to funds that try to accomplish that test but you are going to not see your

SPEAKER_387: money for 5 10 15 years 15 yeah it's well you'll start seeing some maybe if you're lucky at 5 6 7 you'll start seeing most of it between you know 8 and 12 and you might see some stragglers at 13 14 15.

SPEAKER_270: if you're running yells endowment or the ford foundation or sovereign wealth fund who care like 15 years 10 years 20 years it's all the same you just you don't need access to it because it's

SPEAKER_08: only 5 10 15 20 percent of the portfolio so speaking of venture capitalists and returns and lps jason can i show you uh the funniest comic i've seen recently about venture capital this is just just for fun if you're on the video version you see this if you're not uh it's a two-panel comic uh there's a man in a suit talking to a guy in a hoodie and the guy in the suit's labeled vc and he says to the founder you're just a rapper on an llm and then the founder turns around and says well you're just a rapper on an lp and this is niche humor jason but it had me absolutely rolling i loved it

SPEAKER_12: it's true um i mean it's sort of like saying youtube is a rapper around s3 you know stories sure yeah it's yeah okay sure you know netflix is a rapper around uh negative optics cables or you know whatever like sure all right everybody this has been another

SPEAKER_58: amazing episode of this week in startups he's x.com alex cautious optimism on uh substack and uh go spend a hundy pay first newsletter is it a hundy a year it's a hundy a year or 10 bucks a month or whatever 10 bucks a month go get it and we'll see you all next time on this week in startups bye bye