SPEAKER_00: To deal with the amount of chaos that you showed in these charts today, Alex, has been, in some ways, the toughest two years of my professional career. Now, I lead a charmed career. I've had two rough patches. This is the third.

SPEAKER_01: Those rough patches were the dot-com era, the Great Recession, and now. And those three, each one of those has been tough on me. But when you get to your third one, it's like that meme where James Frank goes in a noose and he looks over and he goes, first time. First time? Yeah. It's like, I've been through this before. It's literally like first time, like it's, I know it's going to be in the foxhole, but I know we're going to win the war. And then the question is like, do I have a bum, shoulder and knees that I can't fight the war anymore? I'm 53. I feel great. I love doing this job. I love hanging out with founders. Yeah. You had a great opportunity to bring, uh, six of our companies to Sequoia last week.

SPEAKER_14: Super jazz me up.

SPEAKER_01: Yeah. And, you know, every time I spend time doing a podcast or doing founders, my energy and my battery gets filled and I'm stoked again.

SPEAKER_17: This Week in Startups is brought to you by Coda.

SPEAKER_19: Coda empowers your startup by bringing words, tables and teams together. Strategize, plan and track goals effectively with all your valuable data in one place. Go to coda.io slash twist to get started for free and get six free months of the team plan. Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. And Fundrise. Fundrise provides access to diversified portfolios of private real estate to all investors with their industry-leading, easy-to-use platform. Sign up today at fundrise.com slash twist.

SPEAKER_23: Hey, everybody. Welcome to This Week in Startups. I'm Jason Calacanis, an investor in about 100 startups per year.

SPEAKER_01: And my co-host, Alex Wilhelms, here. You know him from his days at TechCrunch and CrunchBase. Welcome back to the program. What do we got on the docket, Alex? We got a big docket?

SPEAKER_25: We have a simply enormous docket.

SPEAKER_27: So we're going to kick off with a little bit of internal brouhaha because Jason made me change my Chrome Home tab and I have some questions. After that, we're going to get into falling venture capital results and critically how to interpret them. Is the data as bad as everyone thinks it is? Then startup shutdowns are up, but we're also seeing some improving data in the venture market. The latest investor beef and how that all ties together. And then how to sell your startup for 2,000 X ARR.

SPEAKER_28: And if we have time, a quick look at an IPO from India and what IPOs are coming up later on that we're very excited about.

SPEAKER_27: But Jason, over the weekend, you did your usual Sunday download of ideas and thoughts. Thank you much. Keeps me on my toes during dinner. And you had everyone at the company change their new tab screen, be it Firefox, be it Chrome, to be ChatGPT 4.0.

SPEAKER_29: And I set this up today. But before I tell you what I think, tell me why we've all done this.

SPEAKER_23: Okay, so I am paying for everybody in the company, 21 seats, to use ChatGPT 4.0. And there is a massive difference between the previous versions and this versions I'm finding. And what I'm finding is I am massively more productive when I use the technology. However, you have to, when you're doing a new habit, you know, your default settings matter.

SPEAKER_22: And so in the startup world, we have some saying that you'll hear me say all the time when I'm jamming, I'm doing a jam session with founders, which is defaults matter.

SPEAKER_23: And so what you decide to set as your defaults will have a profound experience in a product for your users. And what I found is, you know, because I have little dashboards, I can see who's using ChatGPT 4.0. I can see who uses Slack. I can see who Notion is. When you have a remote company, not exactly spying on people, but it's just general awareness of who's using which SaaS products. And one of the disappointing things is like people are using Notion and Slack all the time. They're using Coda all the time. They're using Grammarly some of the time, and they're not using ChatGPT 4.0.

SPEAKER_01: I believe this technology is going to change everything, whether it's Claude or Gemini or ChatGPT 4.0 or Grok, whichever flavor. But since we're paying for that one, and it's incredible, I tried to set my homepage and my new tab page in my Brave browser, which is my default and my favorite browser, as well as my Firefox and my Chrome.

SPEAKER_23: And to my dismay, it's really hard to do that now. Because every single one of these browser companies covets the new tab. So when you hit Control T or Command T, depending on what platform you're on, and you open a new tab, they make a lot of money from that.

SPEAKER_00: You'll see the news stories that come up have sponsored links in them. It's just a massive moneymaker.

SPEAKER_23: So they don't want you to be able to change it. However, there are Chrome, Firefox, and Brave extensions and add-ons that allow you, when you hit Control Tab, to set a default page. So for some people, this might be the New York Times. For other people, it might be, you know, whatever, Slack or Notion if they run it in a browser. But for me, I set it to ChatGPT 4.0.

SPEAKER_36: And every time I open a new window, I'm not going to Google. I'm going to ChatGPT 4.0 and I put my Google search in there. And this has had, and I've been doing this for a year, but I realized the team's not.

SPEAKER_23: So I wanted to give them that gift of starting with ChatGPT 4.0 and just seeing where that takes them.

SPEAKER_27: Okay. So mostly I love that. But what I'm running into, because I set up this Chrome extension, I put it in the ChatGPT 4.0. Yep.

SPEAKER_26: Now, admittedly, I am using my, I'm defaulted currently to my personal paid OpenAI account. So you won't see this in my usage chart.

SPEAKER_27: But what I quickly discovered is that my Command-T is usually me opening up a new space to put in a URL that I'm already aware of. And so what I do is I hit Command-T and then I go to do it and then it loads GPT 4.0 in ChatGPT. So I may need to like, I'm going to give this a try for a week. Just, you know, let's give it a try for a week, see what happens. Yeah, yeah, yeah. But right now, because I've been doing it for several hours now, it's made me want to punch my screen repeatedly because I've hit Command-T to do a thing 100,000 times? Yeah. 150, like some obscene number. So it's going to take a little while to change my habits. But this underscores your point about defaults matter because if you don't change your behavior, inertia will carry you for a thousand miles. So I'm, I'm willing to do the experiment.

SPEAKER_28: And if my productivity falls off a cliff because I'm screaming at my monitor, well, I was told to do it.

SPEAKER_26: So I think that- What's your favorite browser?

SPEAKER_42: What's your favorite browser?

SPEAKER_26: I got, I got a switch. I'm on Chrome right now.

SPEAKER_27: Yeah. Chrome's great. Brave is fantastic. Isn't Brave based on Chromium, though?

SPEAKER_00: I think it is. I actually don't know definitively because I'm finding I don't see much of a difference between the two.

SPEAKER_23: And I just keep, you know, since I have a powerful machine, my Windows and my Mac machines are super powerful.

SPEAKER_00: I keep Firefox, Brave, and Chrome open typically. I don't use Safari because I think it's garbage. But it is, yeah, it takes a second to load ChatGPT.

SPEAKER_23: But then you just hit Command-L and you can change the URL really quick. But the more you use the technology, I think the better you get at prompting, the better you get at prompting, the better the results are. And you start the flywheel because the software is also getting better and it's learning about you. And so once you start hitting 20 or 30 searches, questions a day, it really starts to work. I'm finding. So anyway, so there's a bunch of Chrome extensions called new tab. You can also set your homepage, but you need to hack these browsers in order to control your new tab page.

SPEAKER_36: I also like the idea of, I used to have my, and I think I still have my Chrome set up to do this, that it loads like seven webpages when I launch the browser.

SPEAKER_23: So I keep my news tabs in Chrome when I launch it or I hit the home key, it loads all seven. So that's another option for people, but it's a really great hack to get you going.

SPEAKER_01: And the data and the searching of the web is really the best part about ChatGPT 4.0 is that it is so fast in searching the web that I always append, add citations to sources. And man, does that change everything because now every piece of information I get, it gives me the sources and the number of hallucinations has gone way down if it checks the web.

SPEAKER_27: Can you automatically tell GPT 4.0 that I, Jason Keller candidates always want you to do citations and that it'll do that forever?

SPEAKER_26: Or do you have to repeat that on a per query basis?

SPEAKER_01: It's a good question. I know in settings, they did have it set up in order to have like, um, your instructions. Um, and so if you go to customize, um, if you go to to customize ChatGPT, let me, um, you can put into it, what would you like ChatGP to know about you to provide better responses? How would you like ChatGPT 4.0 to respond?

SPEAKER_59: And so I say, please always give citations, please always present data in a table. Please use concise, simple language, simple language. Fewer words is better than more.

SPEAKER_01: Boom. So I, you know, it's interesting. I had written that before, but I switched from my personal to our corporate and I hadn't put them in there.

SPEAKER_23: So if you do that and then you ask a question like what's happening today in technology news, it should go out and search the web for technology

SPEAKER_64: news, August 19th, 2024 and go find news for you. So it's, oh, this is pretty great.

SPEAKER_27: All right. Yeah. All right.

SPEAKER_28: Well, if you didn't expect this on twist today, welcome to, uh, how to make ChatGPT work better for you.

SPEAKER_70: Listen, are you spending too much time as a founder, all tabbing between your team chat, maybe a document editor, spreadsheets, database as well. It's time for you to consolidate all of that knowledge into one platform. And that one platform that I use every single day is Coda. If you don't know Coda, it's like a new category of software best described as like a collaborative workspace. It pulls together all the stuff you got going on in documents, spreadsheets, maybe a database, maybe a built-in app, and it's super easy to learn. It's incredibly powerful. In fact, we use it and we run Founder University on it. Then we had a new project, twist500.com. We wanted to make a database for the listeners of this podcast that essentially profiled the top 500 private companies.

SPEAKER_71: It was a no brainer. We said, oh, we should make a website. So I got twist500.com. And I was like, what are we going to do this for? Everybody in the meeting was like, Coda, Coda can do that. And that means I don't have to buy new software. It means I don't have to hire a dev shop. I can just do it myself. Coda empowers your startup to strategize, plan, and track all of your goals effectively. Take advantage of this limited time offer just for startups.

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SPEAKER_00: The story I wanted to talk to you about was, you know, I, I kind of, you know, sometimes on the weekend, you know, I'm on the ranch now.

SPEAKER_36: Uh, I was, you know, I, I, I dusted off my Ruger. I haven't fired it in five years, cleaned it up. I did a little shooting on the ranch. I got a, I got a shooting range outside. I got a couple of stogies out. I was solo on the ranch, no kids, uh, no wife, but. I have my bulldogs.

SPEAKER_01: So it was kind of like one of those weekends, you know, maybe you pour a beverage and maybe you don't, but you know, once in a while I might pour a beverage and, um, yeah, I might've been sipping on something.

SPEAKER_00: And I just, I just went full based.

SPEAKER_76: I went based, uh, and I went based for 48 hours on my Twitter.

SPEAKER_27: I, I saw some of your all caps tweets, one of which is going to be here later in the show.

SPEAKER_25: Um, to discuss a particular member of, uh, of the government, but I have to say that I, I miss, I miss shooting guns.

SPEAKER_27: Cause I, I grew up in, I grew up outside a small city in Oregon next to cows. The cows are now gone. But when I grew up, there were cows across the fence. And so we could just take guns and shoot them off the back porch. We took them up into the woods and just shot trees. And I got my first gun when I was 12. Good time to learn. Yeah, absolutely. Good age, yeah.

SPEAKER_28: 22, uh, Winchester, lover action, learn to clean it, learn to carry it properly. Uh, never got rifle remarriage, cause I'm a terrible shot.

SPEAKER_26: Uh, small fact, but I, I miss that a little bit because I love my walkable neighborhood. I love the restaurant density. I love being near institutions of higher learning and culture. Yeah. But you can, if I shot guns on my back porch, I would hit people, you know, like, so I'm

SPEAKER_81: kind of jealous that you have an actual shooting range versus I have enough room for small dogs, which is just not enough to shoot guns.

SPEAKER_36: Um, yeah, you need to have acreage, uh, to shoot and I am for reasonable gun

SPEAKER_23: ownership and great training. Um, I wish we didn't have any guns in the country. I would be absolutely in favor of us being like Australia and having none, but you know, it's not going to happen here. We, we have a country that has a certain operating system, freedom of speech one and right to bear arms too. Yep. It's a pretty interesting experiment. Um, and it makes us into the rebel country we are, and it's not going to change in our lifetime or our children.

SPEAKER_01: So, you know, I've kind of learned to accept it. And if you want to live in a society without the first amendment or less first amendment protections, you can go to the UK, you can go to Australia.

SPEAKER_23: And if you want to live in a society without guns, those two locations also get less emphasis on the first amendment, less emphasis on gun ownership.

SPEAKER_26: So yeah, you can get sued for a lot. You can talk more stuff in the UK for speech than you can in the US. And, uh, if you don't know what I'm talking about, um, JK Rowling has made an excellent example of how to use, uh, the UK's laws to, um, uh, defang critics.

SPEAKER_27: You might say, but enough about all that, Jason, we have hot venture capital data to get into, and I want, I wanna, I wanna push back against the narrative that immediately formed from this Carta data set. So we're looking at venture capital fund performance here, Jason. And I, what I want you to do is explain to people what median IRR per

SPEAKER_90: vintage year means in simple English. What does this chart show us?

SPEAKER_91: Sure.

SPEAKER_23: Um, so, uh, IRR, uh, is the internal rate of return. Um, and so what that means, uh, the internal rate of return is what percentage on average, do you return, uh, for every dollar put in?

SPEAKER_01: So if you put a, let's make it easier. Let's say you put a hundred thousand dollars into a venture firm and, uh, you know, 10 years later, you got a million dollars, um, back, right? So you got 10 times the money you invested back. So that's the multiple of invested capital.

SPEAKER_92: Now you have to figure out, well, what's the percentage of that?

SPEAKER_01: Well, if you do, uh, and that would be your.

SPEAKER_00: Percentage return each year. And of course that compounds, et cetera. So it is not as simple as 10 X. If you were growing, um, at seven per 7.2% a year, you double your money every 10 years. If you're in venture and you're going at 15%, well, you should be doubling

SPEAKER_94: your money every five years or so, uh, just over four, between four and five.

SPEAKER_71: Um, so then that means you're going to double it again in by year, you know, nine. And that's where you get to this most venture funds are going to return two to three times your money over 10 years. So when you talk about a vintage, a vintage is a period of time, like a wine vintage. So a wine vintage might be done by year in venture. You would probably look at, you know, four years because that's the time period over which you would deploy the cap. So you might have a vintage.

SPEAKER_00: Like when I started in 2009 to 2012 or 13, that was considered an extraordinary vintage. That's where Airbnb, Uber, a lot of interesting companies came out of the great recession.

SPEAKER_01: So when you look at vintages, what would be the drivers, Alex, in returns by vintage in wine? It might be climate. It might be soil. It might be, uh, you know, like I said, the weather, you know, could it be a cold front. It could be a heat wave. It could be like one or two days of extreme heat, you know, do something to the vines. That's damaging. It could be a flood, right? So, and it's by region. So you, we understand what could happen in wine that would define a great vintage.

SPEAKER_98: What do you think in venture in your experience, um, would determine how good a vintage is?

SPEAKER_26: Well, where it sits in a technology wave is going to be very important. If you think about where Uber came to be, came along with Lyft, DoorDash, a lot of other companies that took smartphones, applied them to new consumer services.

SPEAKER_27: And there was a period of time, which those grew very quickly. So if you were a consumer investor in that era, those fun vintages, if you put them into the bright companies could do very well macroeconomic conditions, of course, matter quite a lot.

SPEAKER_26: I think the reason why some of those funds back in that day were so strong were because everyone was, um, just freaking out. If you will, about the 2008 financial crisis is the economy broken or are the banks going

SPEAKER_27: to all fail? What will happen? Prices are cheap. If you buy a good company, then better returns. And then also the exit climate, which we'll talk about a lot today and, um, what you can get perfect of a fund.

SPEAKER_23: So you nailed it. The entry price matters, um, when I invested in Thumbtack, Uber, um, uh, data stacks, you know, all unicorn companies, they were on average four or $5 million evaluations for their seed

SPEAKER_01: rounds today, those same seed rounds would be probably 15 million. So that means you would pay three times as much, or you would own three times, you'd own a third of what, you know, percentage ownership was so very simple, uh, to understand that. Then if you were to exit a company in the last two years, when the stock, or let's say two years

SPEAKER_23: ago when Silicon Valley bank blew up in February of 2023, or 22, when did that happen?

SPEAKER_106: Oh man. That's I have baby brain. I'm going to.

SPEAKER_23: Today's 2024. I think it's two years ago. Maybe it was 2022, but it could have been 2023. Are we on? Yeah. That actually makes sense that we are on the one.

SPEAKER_108: I'm asking chat GPT 4.0 and it lets me know that Silicon Valley bank collapsed on March 10th, 2023.

SPEAKER_00: Right. Yeah. So that happened in the spring. Uh, so we are whatever, 15, 16 months. Wow. It feels like a world ago.

SPEAKER_71: And that's when I last used all apps. When I use all caps, I might be sipping on a beverage. I might be alone, no family around to ground me. I might've been firing a revolver and smoking, uh, El Rey de Mundo or Monte Cristo. You never know anything's possible, Alex, but you

SPEAKER_23: described perfectly, um, you know, what matters in terms of driving returns. You could have a technological wave today. It's AI previously was mobile cloud, SaaS client, server, broadband, whatever it is.

SPEAKER_01: So surfing a wave, then you got entry price. You got exit price. Well, if Uber and Airbnb go public into a peak Zerp and, you know, they, they didn't

SPEAKER_00: have insane valuations. I'll be honest, the stock market was kind of. Luke warmer on these money losing companies, but you know, when you get public could also matter. And then when you decide to distribute matters, right? You could have sold your Uber at a $10 billion valuation. And some people did. And then other people held it to a hundred billion dollar valuation. And that's obviously a 10 X swing. So when you decide to exit, how you decide to exit could also drive that.

SPEAKER_01: The information from Carta was talking about a DPI. And so, you know, when you distribute capital, um, is critically important.

SPEAKER_43: We're going to pull up this DPI chart for you.

SPEAKER_28: What this chart shows just to give you a little bit of grounding is each line is a year or a vintage in our kind of parlance here. And this is showing how many funds from a particular vintage over quarters since inception. So time moves to the right have returned actual cash.

SPEAKER_27: The technical term is presented funds with DPI over zero by quarters since inception. And Jason, mostly they go up the same direction, but there are a couple of outliers here that

SPEAKER_113: have a theme to them or a trend.

SPEAKER_61: Yeah.

SPEAKER_00: And so DPI is, uh, distributions divided by paid in capital. So if you distribute a dollar and you put a dollar in, it's a one. If you distribute 50 cents, you paid in a dollar. It's, uh, 0.5. If you gave back $3 and you invested a dollar, it'd be a three.

SPEAKER_01: So DPI that's actual cash and stock sent to the LPs, the limited partners of fund. There's TV PI. That's the total value to paid in. So if on paper, Airbnb is, or maybe a better example would be Stripe. You're sitting on a bunch of Stripe. It's valued at a hundred billion. You've got, you know, uh, a hundred dollars in TV PI to every dollar that's been paid in. Well, you've got this, you know, a hundred to one, um, with your fund, even if all the other, uh, bets in the fund went to zero. Now you're Sequoia, you're sitting on it. You say, you know what, we're gonna start selling, I dunno, a third of that investment. Now your DPI would be 33, 33. You sold a third of your shares. You got 33 DPI distributions. You'd send the cash to your LPs and you got 67 or so, um, TV PI left to go. And the whole name of the game in venture is your TV PI. The total value, the paper value to the paid in capital could be very high. And then what you're trying to do is fill it in with actual real cash dollars distributed. Since the last couple of years with very few IPOs, with founders wanting to stay private longer and M and a being taken off the table, a lot of the early DPI has gone away. It has been replaced in some cases with secondary sales of shares. And you have, uh, weird acquisitions that were done by like character AI or, um, the, the AI company bought

SPEAKER_116: by Microsoft, um, inflection where they did inflection when they bought the shell company.

SPEAKER_00: So anyway, that tells you everything. You look at this chart quarter. Since the vintage inception is the, that's the X axis on the bottom, right? Yep. So you have, uh, eight quarters for 2022, in other words, two years, because it's 2024, four quarters in a year, um, you know, only X percent, 5% have distributed capital.

SPEAKER_01: Then you get to 2021 vintage, uh, and at three years, you can see it's all over the place. 2019, you had 24% in 2017 had distributed 19% for 2018 in those three years, you know, those vintages, excuse me, we're probably selling into peak zero, right? Yes. Yeah. Three years to 2019, you get 2022, yeah. Three years to 2018, you get 2021, three years to 2020, you get 2020. And then as the years go on, it's just very hard to have DPI when the M and a market is closed. That's what this chart shows us.

SPEAKER_28: So the, I looked at all these, I saw IRR trending down lower in 2022 compared to 2021 funds, worse than 2020, et cetera, et cetera, et cetera. I saw that TVPI is lesser.

SPEAKER_27: I saw that this chart showing that DPI is, uh, slower to form than it was in, in recent prior venture vintages.

SPEAKER_26: And then there came the counter argument from David Clark. Now, David Clark has been on twist episode 1906 and liquidity 1930. So a regular around here, he's the CIO over at FinCamp international. And Jason, that is a fund of funds.

SPEAKER_121: If I think correctly, it's a fund of funds.

SPEAKER_00: So he, um, collects money from LPs and then he picks, I think he's got like a magnificent 11 or 12 funds. So he's very, very diligent at only investing in a small number of venture funds for his LPs. And so his LPs say, you know what? I don't have time to pick venture funds. There's too many of them. There's thousands, low thousands of them. I'll just pay 10% to David to go do that work. And then I'll pay again, the 20% carry to those people. So I'll pay 30% or even 35% carry to these two parties to manage my venture portfolio. Because he'll do a better job than I will. And he'll do 10 per at least if he does 10% better than I do as a family office, I don't need to hire somebody and you know, it's competitive to hire these people.

SPEAKER_23: So that's his business line. He also happens to be doing this for multiple decades and has, and is a data nerd. So he's kind of money ball. He's kind of like, um, who's the kid, Jonah Hill and money ball.

SPEAKER_26: He's kind of the, uh, the quant effective in that movie. If memory serves.

SPEAKER_54: Yeah. You can think of, you can think of Dave as like a money ball kind of guy for venture.

SPEAKER_26: And he had, um, a couple of comments about this data that actually really helped me. And I saw you shared them as well. So I'm going to run people through a couple of quick points here.

SPEAKER_27: Um, first up, he says that the fact that median,

SPEAKER_26: internal rates of return for the 21, 22 vintages are lower is irrelevant because it means the market has just normalized. And the days of easy money and instant write-ups are over. Okay. Totally valid. And then he applies the same idea to TVP eyes saying that the J curve has returned

SPEAKER_27: and the market has normalized. Fair enough. Yeah. So his point is DP eyes in the first five years are kind of irrelevant because you shouldn't really care about that much anyways. Valid. And then his last tweet, I think is the most critical one. Summary. VC is hard. Average VC fund performance is disappointing. Most companies will fail. It takes a decade for winners to really develop. This report confirms that market reality has been restored. Now, this is the guy who puts money into venture capital funds saying VC is hard and an average VC fund performance is disappointing. Explain to people why someone who runs a fund of funds and puts money into venture capital

SPEAKER_26: funds would back an asset class that they think is so difficult, so illiquid and occasionally disappointing. Because to me, that's the tension here. If this is just back to normal, is normal that good?

SPEAKER_23: Normal is two X to stock markets average.

SPEAKER_00: And that's basically all you need to know. And for seed funds and the early stage funds, which launch is part of, you know, it's typically three X. So in the same time, you could get, you know, 7% of your IRR. You should be able to get 12, 14, 20%, 25% IR from the venture funds.

SPEAKER_71: The problem is because of the power law, it is confounding and disturbing to bet this way.

SPEAKER_00: It would be literally like betting on roulette numbers. You know, which might be, I don't know if there's 40 different spots on a roulette wheel. I seem to remember like it goes up to 42 or something. I don't play roulette all that often, but you're asking chat GPT four. Oh, you opened a new tab window.

SPEAKER_71: So in other words, each of those numbers, each of those numbers is like pays off 40 to one or 45 to one, something to that effect.

SPEAKER_00: Now, if you go in the stock market, some stocks lose half their value.

SPEAKER_01: I got crushed on Warner brothers, other stocks. When I did J trading.com, like Facebook paid off five X 500%. So there's your swing for me as a public market investor, 50% loss for Warner brothers. And then all the way at the top 500% gain for Facebook. And overall, my portfolio is just crushed it, but it's a tighter band. You know, what you'd see in venture is 90 of your companies returning $0 and then 10% and then one, you know, one of 5% of your companies, one in 20 returning 95% of your dollars. And then the other 5% contributing roughly 5% of your dollars. And, uh, that's the confounding part of it. So it should be a small part of your overall portfolio is how most, um, most capital allocators think about it. You have had people like Yale or Harvard or some endowments who get super aggressive, go to 20%, 30% private markets, venture capital and private equity. Some even go 35% because they really want that juice and they don't have a problem waiting 10 or 12 years because Harvard will be here in 10 or 12 years. They'll be here in all likelihood in a hundred or 200 years. So that's the answer of why people, you know, will embrace this quixotic, peculiar, challenging market.

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SPEAKER_27: A question about the LPs. Because clearly, David Clark and his company are going to keep investing into venture funds.

SPEAKER_28: But let's just say you showed up, you put some money into a couple of funds, maybe some emerging managers in the 2000 to 2022 bubble era. You got your face ripped off. It's your first time around. You're probably running for the hills. Does this set of charts that we're seeing that shows, I think, some of the pain that is the

SPEAKER_26: hangover from the last party we had in technology and startups, does that actually make any long-term impact on the viability of VC funds' ability to raise capital? Or is this just the standard, it went up, it went down, everyone laughed, everyone cried, and now we're just going to normalize like it never happened.

SPEAKER_91: What a great question. You're a great co-host. It is literally the question you have to ask yourself, which is,

SPEAKER_00: what impact does this have on the market if everybody kind of expects boom busts? Well, I can tell you what will happen is a small venture firm that just finished its first vintage or second vintage during that time period will have no DPI. You know, their TVPI might have gotten flipped. And let's say their top company was a high flyer in crypto.

SPEAKER_23: Like what was the NFT company that became worth some crazy amount of money? It was like the marketplace.

SPEAKER_28: OpenC, it was like 11 or 12 billion. Yeah. Because it was, I mean, at that point in time, it was minting money. Yes.

SPEAKER_27: Like a, like a printing press. Then the market turned and now it's a bit of a dog. But like at the moment, I kind of actually, I wrote at the time that it was,

SPEAKER_142: it smelled like IPO fodder because its numbers were so impressive. They hired a CFO to go public and then he left in like six months because. Yeah.

SPEAKER_50: It's kind of like the tulip story all over again. Like, man, if tulips are the most coveted thing on the planet and you've got a tulip farm,

SPEAKER_23: man, you're going to print money, but you got to make hay while the sun shines, because what if people decide, yeah, they don't like tulips anymore, or you can go find them in the forest.

SPEAKER_00: So that company, if that was your big winner, if that was your, you know, equivalent to me of Uber, Robin hood, calm grin, whatever. And all of a sudden it becomes worth zero.

SPEAKER_71: And you invested in it at a billion. You thought you had a 12 X bagger and you put a million dollars in it from your seed fund. And your seed fund was 5 million. And now, you know, you were sitting on 12 times a million, 12 million dollars. You had a two and a half X fund. It goes to zero. You're underwater. Essentially. You're not even going to return the million.

SPEAKER_00: How are you going to raise your next fund? You go into a meeting. You're like, we made 30 bets. This was our number one bet. Two years ago, we were two and a half TVPI. And they say, okay, what is your, did you mark that investment down yet? What was the last round? What is it trading at on secondary markets? Well, then what that does is it will trap some of these new venture firms. And the founders of those firms just might not have the wherewithal to say, you know what?

SPEAKER_01: I'm out of investable capital. I'm just going to shepherd these companies. Try to get some DPI. I'm going to ring every last dollar out just so I can return. The $5 million I raised in that first fund. And at least I can give people one X their money. Say I've learned a bunch. Please give me another shot at 10 and give me 10 million to deploy. Here's what I learned. And the fact is, you know, LPs, uh, might be feeling poor.

SPEAKER_23: They might be going through the same cycle. And then I think a lot of VCs, um, a lot of VCs will just give up because it's too hard. And a lot of VCs shut down after the.com bust. After the great financial recession. And there was another piece of data on, I don't know if it was card or one of the other providers that like it used to like some, some incredible number, 80% of first and second time funds were not able to raise their next fund.

SPEAKER_01: And it typically was like half. So you'll see a lot of the smaller ones blow out. You'll see a lot of people who let's say you were a VC and you had a hit and fund two or three.

SPEAKER_00: They might just retire for fun, four or five. They might just call it a day because I made all my money. Do I want to go through this all again? I was talking to one VC who's 10 years ahead of me.

SPEAKER_148: And he was like, you know, I kind of did it.

SPEAKER_00: The chances of me hitting, you know, an X, Y, or Z again are low. I mean, it's possible, but it's not probable because I got lucky on these and I spent 30 years doing it. What's the point of the next 10 years?

SPEAKER_01: I got more money than I need. And I think that is what kills venture funds. The two things that kill them is not getting DPI and getting too much DPI.

SPEAKER_23: Either of those scenarios will cause retirement or a career change.

SPEAKER_26: Yeah. I think the too much DPI is funny because, well, I have a lot of thoughts about that because I'm

SPEAKER_27: always surprised when people who have multiple billions are still on the grind.

SPEAKER_26: Because if I had 1 billion, um, you would never hear from me again. Cause I'm going to go read every science fiction novel ever written in the back of my cabin with the huge fence around it. Goodbye. Respect.

SPEAKER_153: I think what you mean is you're going to have the authors of those books sit next to your

SPEAKER_27: bed and read them to you each night for an hour. I would have those banging book club. I would get, I would just like tell my friends, we're all going to read book X. And I would just fly the author in, you know, put them up someplace nice. Have them come to our discussion. And then tell us what they like. No more guessing the author's interpretation. Here's Jane. She's going to tell us what she was thinking when she wrote this book.

SPEAKER_160: You know, I just had this vision of Philip K.

SPEAKER_161: Dick, like sitting at your bedside, reading you, you know, do androids dream of electric sheep.

SPEAKER_26: Can you read it again? Adrian Tchaikovsky. I'm currently reading another one of his books.

SPEAKER_28: I would pay, I don't know what, what kind of cost to get an author like 15 K. If you're a billionaire, who cares?

SPEAKER_161: Exactly. I mean, it's, uh, I knew a billionaire who loved the music and electric guitars and all

SPEAKER_00: this kind of stuff. And he was an okay player as well. I, I didn't know him personally. I knew him. I knew people around him and, uh, he's since deceased, but, um, he would have a number of artists at his house and, uh, some people were, you know, in the band were paid and some people were just, you know, notable musicians who wanted to hang out with a billionaire and just play music.

David Friedberg: And yeah, you can, you can have those experiences if you like.

SPEAKER_26: Or you can be Microsoft. One time I was at a Microsoft event. I forget. This was probably like, I don't know, 2014, 2015. They had, um, Jordan, the, uh, keyboard player from dream theater, kind of like open up their main event and I was bopping around excited to press pass. And I was like, I'm going to go shake his hand. And I did. And he was very annoyed with me for interrupting this conversation with someone else. But I was still like, that's a cool thing to do. That's what I would do if I had that kind of money.

David Friedberg: Well, actually I might as well say it since you said Microsoft was Paul Allen. And I don't think there was any secret that he liked to play guitar with famous people.

SPEAKER_176: Also Paul Allen was beloved. So I think it's okay to say, say fun, interesting things about, about Paul. Cause people just liked him. Yeah.

SPEAKER_71: So anyway, uh, the date is out, you know, for me, this sent me on a little bit of a tizzy

SPEAKER_00: because if you can, all of the early DPI that happens is not from Uber or Airbnb or Coinbase going public. It's from secondary shares in Stripe and Uber and Masi Yoshisan or whoever, or, you know,

SPEAKER_01: whoever's doing an, uh, angel list SPV or whatever for space X, that's where it comes from. And, uh, you know, I just think Lena Khan is a communist who is reinterpreting these, um,

SPEAKER_00: you know, laws in a socialist who like, I think it's really like anti-competitive.

SPEAKER_01: And I've talked about it here many times, but I think like the reinterpretation of the, you know, antitrust laws is not a valid way. And it's put a chilling effect on the entire market.

SPEAKER_00: We've discussed it here before. And I just think, you know, when you have read Hoffman, the ultimate liberal and the all in, you know, lunatic, you know, not that we're right, but, um, uh, but a couple of people on the right and libertarians saying like, this is not the way to run antitrust.

SPEAKER_71: You should be giving speeding tickets for breaking the law, but. You know, let, let there be some M and a let, let there be some light. And then the UK and EU following suit, uh, on blocking all this M and a, you would have more money to deploy into the next generation startups. If you could get those M and a singles and doubles, if I could be selling right now, our startup portfolio, you know, let's call it the tweeners, the ones that are never going to

SPEAKER_23: be public, but they got to some level of 10, 20, 50 million in revenue. They could be great sales at 10, 20 times revenue, 30 times revenue, 40 times revenue to a Microsoft Google, or, you know, the long tail. Nobody will even try Alex. They will not even try to buy companies.

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SPEAKER_26: Well, you and I have had this conversation and I want to take that and frame it in this moment, because you and I talked about a tiered system. You know, like if you're above a trillion dollars, you can't buy anything, uh, 500 to a trillion market cap, you have, you know, we're going to look at it under 500, go crazy.

SPEAKER_174: And just to be clear, like Adobe worth about a quarter trillion, so they could have bought Figma

SPEAKER_26: under this paradigm, but it'd be tough for Microsoft to go buy, uh, the new short. Absolutely. So here's my question. Google's in trouble right now. They lost that antitrust case.

SPEAKER_27: The government is going to try to break them up. I will see. I recall the Microsoft case in the nineties. And also I know how much influence that company has. So we'll see if it actually happens. But if you did take alphabet and broke it up into like, I don't know, three or four pieces of 750 billion a piece, then not only would you have more companies you could sell startups to, you'd have a more competitive market in which Google might have to be with a different part of its former corporate world to get that company. So I wonder if there's a combination of, okay, everyone go crazy with acquisitions, but we're going to break up a couple of the major players. That's my dream world scenario. Lots of capitalism, but fewer, you know, Rockefeller style companies out there.

SPEAKER_185: If that makes sense.

SPEAKER_71: Yeah.

SPEAKER_00: I mean, the history of breaking up companies is it's a very small cohort, um, like the bells, you know, being broken up into many different companies.

SPEAKER_71: There really aren't that many true monopolies out there. If you were to look at search, it is one of the true monopolies, 90%.

SPEAKER_00: But if you were to look at it as online advertising, it would not be a monopoly because you have a long tail of meta tick tock, the shopping cart companies, Amazon, Uber, Instacart, you got upstarts like tick tock and Reddit, you have Twitter, you have many, many different ways to spend your advertising dollars online. You could say it's a duopoly and that would be true, but it's not a monopoly. So it's just rare that we have a monopoly. Even, you know, um, Apple is hard to look at Apple iPhone as a monopoly. If there are a hundred other Android phones and Apple is still under 60% market share in every region in the world.

SPEAKER_54: And Android's got the other 40% or 50%.

SPEAKER_98: So, you know, it, it's hard to say that these are hardcore monopolies, but they have got a lot of scale. And since they have a lot of scale, I do think, you know, if you did, I think the

SPEAKER_01: breaking it up is saber rattling to get a settlement and almost all these things are a negotiation and a settlement. And I think the settlement will be, I believe Google alphabet will offer up one or two spin outs, um, in exchange for not being broken up. And I think the logical spin out is YouTube because it's painful, but it's not. So painful that it's a death kneel. If you took YouTube out, you remove whatever it is, 40, 50 billion in revenue. It becomes worth more as a standalone company. And it competes with Google for advertisers. So then advertisers are saying, yeah, like I could spend it on search ads, or I could spend it on YouTube. Where do I want to put my budget? And, um, I think for shareholders, I think I might J trade more alphabet because I do

SPEAKER_23: think them being broken up on locks value because it's hard to understand the value of

SPEAKER_00: things when they're all consolidated like this, it would be very bad if Chrome and Android were spun out as its own companies, because those are major contributors to search about a, I gotta think like maybe half of all the searches on Google come from mobile phones and default search engines, that combination. Because to use Android, you have to have Chrome. It's defaulted to Google. They pay Apple, what? 20, 30 billion a year to be the default there, which is what got them in trouble is doing those kinds of deals. So, I mean, if you did pull that out and Chrome and Android were its own company, let's say

SPEAKER_23: you put those two together and you just called it, you know, whatever, Android and Chrome,

SPEAKER_01: uh, corporation, the Android Chrome corporation is terrible name, but it rolls off the tongue. It's brilliant. Brandon, the, I mean, the Android, you know, Android as a standalone company, you can buy stock in that own Chrome as well. They would be able to go to bang. They would be able to go to Apple. I think Apple should buy duck, duck, go and brave search engine. The brave's got a great search engine with an API. I would buy both of them, make your own Apple product. And then you've got Apple and Bing competing, or maybe just buying 20% of the searches on Android each, and then Google buy 60% of the searches. So, you know, that could be what happens with Apple is Apple says, you know what, we're going to not do an exclusive. We're going to give, you know, 40% of our search traffic to Google default 40% to bang. And we're going to give 20% to 10 other players, 2% at a time. And we'll do a rev share with the 20%. So it's like easy for them to afford to do this. And then we're going to give, make Bing and Google pay a minimum. But anyway, that would be very damaging. I think to the monopoly, but at the same time, I just had you, I convinced you to set your new tab to chat GPT-4, which has no advertising and you're getting tremendous value there without going to Google.

SPEAKER_27: And I'm going to have to buy a new monitor after I shattered this one, which is already on the list of things that I needed to do. So totally fine there.

SPEAKER_201: Time to get you more memory. I think you need more memory on your computer.

SPEAKER_82: I've got so, I've got so much.

SPEAKER_27: The problem is tweet deck is just garbage.

SPEAKER_202: All right. Um, the venture conversation and, and the returns and the market set up and so forth.

SPEAKER_26: I have a different thesis about why we are seeing so many VCs squabble right now. And it relates back to what we're describing, which is an exit dearth, the lack of DPI concerns and so forth. I think that the VCs are getting frisky with one another on Twitter and complaints and shading and the beefs we've seen lately because they're all kind of stressed out at work and they're taking it off on one another back when there was endless returns to be had quick markups

SPEAKER_28: companies raising two times in a, in a year, everyone felt like a genius. I think everyone was like, you know what? You're fine. I don't mind you, Mike Moritz. I don't mind you Andreessen Horowitz.

SPEAKER_26: And now everyone's looking at like, we're having some, some tough times and that is leading to the beefs and yes, uh, Jason, I do want to talk about the Mike Moritz SF standard piece and the Andreessen thing, because it struck me as more vitriolic than I expected. So I was hoping you could, I don't know, peel the curtain a little bit and, and talk about why Ben and Mark from Andreessen Horowitz, um, tried to front run a piece in the SF standard about Ben and his family and their changing political donations and why they were so incensed by what ended up being a relatively, in my view, innocuous anodyne and fair story about a change in the wind

SPEAKER_202: for one important family.

SPEAKER_161: First off, I love your analysis that there's not a lot of exits and money to be made right now. And so people are distracted.

SPEAKER_00: Um, you know, and it's also, we're talking about the small number of VCs who become billionaires. Most VCs simply become millionaires. Sometimes they become decamillionaires and rarely do they become worth individually,

SPEAKER_01: any VC over 50 or a hundred million. It's actually very rare.

SPEAKER_00: It is one of these professions where you can make a million dollars a year and then, you know,

SPEAKER_23: hit a bingo and, you know, make a couple of million in distributions every 10 years. And then you end your career with a net worth of 10 or 20 billion, which is nothing, nothing to

SPEAKER_01: complain about, but you know, we, we kind of put VCs into the same bucket as entrepreneurs who win. It's two different scales. You know, an entrepreneur, you know, if they do hit can do extraordinary. And then the VC remember who invested, if a VC owned 10% of Google or air, let's say Airbnb,

SPEAKER_23: 10% of Airbnb, they got $10 billion exit on, you know, some, I don't know, let's call it a hundred million dollar investment that, you know, like they did a late stage investment, turned a hundred million

SPEAKER_71: into 10 billion, a hundred X. It's the dream 10 billion, 20% of 10 billion or so is 2 billion, 2 billion divided by five or six partners in a firm, plus the employees. You would basically divide that number by seven and you would get 300 million a person. They would pay their capital gains. They would make 200. So the most amazing VCs who make the most amazing bets could become worth.

SPEAKER_00: A hundred or 200 or 300 million. And in very rare cases like Michael Moritz, we have Google YouTube.

SPEAKER_23: I mean, you have like an incredible cohort WhatsApp in there. Yes. You could become a billionaire. It does not happen often putting all and Mark Andreessen and Ben obviously made money as founders and made money as the heads of their firm.

SPEAKER_30: This is Michael Moritz is retired. He started a publication called San Francisco standard.

SPEAKER_00: I read the story if this was just about, if this wasn't the technology industry, if this was Hollywood, if this was, you know, New York media, it wouldn't be that big of a deal.

SPEAKER_01: I agree. Um, and if it wasn't Trump and it wasn't a family, um, that is a bi-racial family, uh, with an

SPEAKER_72: African-American wife and it didn't have the tenor of going after a spouse, this would not be contentious.

SPEAKER_01: A key part of this story is that you've gone after what most people would consider a civilian. Uh, Ben Horowitz, his wife is not a partner at Andreessen Horowitz. They really centered this story equally about Ben, who's making a decision to support Trump. Because as he said in the, like our plus podcast, it was not the, the Biden and the Biden Kamala Harris,

SPEAKER_23: uh, socialist ways are not good for our industry.

SPEAKER_36: We talked about Lena Kahn in the previous segment, perfect example.

SPEAKER_214: So that's how big tech feels. The story is actually pretty fair.

SPEAKER_71: Um, I read it. I was, the only thing I found weird about it was they're like, nobody can figure out why they've had such a change in position from being Hillary and Kamala supporters in the past to being Trump supporters.

SPEAKER_00: It's like, um, except if you listen to the one hour podcast and then it explains it in excruciating detail, they just believe it's simply a pragmatic one. But here's where it got too personal. Okay.

SPEAKER_71: You put MAGA hats on Ben Horowitz and his wife. Yes. You never go after wives and spouses, even if they donate.

SPEAKER_00: And then they went to the wives, friends and colleagues, in addition to Ben's professional context. And this got very personal. And when it gets personal like this and you start mocking somebody's spouse, who's a civilian in most people's minds. Yeah. Now in other people's minds, the journalist minds, they say she's fair game because she hosted parties. She did clubhouse rooms and she donated to people and she did fundraisers.

SPEAKER_01: Fair enough. You could say that, but you, your original question, I always think about the original question is why did this get so contentious? It's a publication backed by a rival venture firm, Sequoia and Andreessen have a rivalry. And it included somebody's wife and anything that has to do with Trump and MAGA gets toxic real quick, especially in a town like the Bay Area.

SPEAKER_223: That's why it's so contentious.

SPEAKER_39: Okay. I have lots of thoughts about this. I do appreciate that perspective.

SPEAKER_26: I think it's a very good one to have laid out there. The first thing is the Streisand effect. And if you're not familiar with this, it's if you try to get something taken down or put a lid on it off and you end up making it bigger. I would probably not have read this if it hadn't been for the brouhaha and the, what's called the front running, which is a media term in case, let's say I'm going to write a piece

SPEAKER_27: about, you know, here's in Calacanis is a rogue raccoon farmer in Austin and breaking all sorts of rules and so forth. He might tweet out.

SPEAKER_225: I'm not a rogue raccoon farmer. I am in fact, a very, uh, good pro raccoon pro raccoon. I love every raccoon, you know, he might front run my story. Terrible idea.

SPEAKER_26: I really should have picked a better idea than that one. Um, but, uh, to me in this case, it got so big because they were so unhappy with it. Now, a couple of other important things. One civilian to me is a very particular term and it implies, uh, no, not playing on the field at all. I think it's perfectly fine to say that this piece was too focused on the spouses equally, and it should be more focused on Ben than her. Fair enough. That's a, it's an editorial question that we can always criticize and that's perfectly fine. But I think given the scale of her donations, activities, media profile, and so forth, I think she's in my view, fair play. And they also broke down her donations over time, including the period of time and years in which

SPEAKER_27: it was mostly blue in the American political parlance. And I thought that was good inclusion to show the full picture and so forth.

SPEAKER_26: The thing where I actually get a little peevish is the, the MAGA hat thing, because Mark Andreessen, by the way, unblock me, please. So I don't have to keep loading your stupid tweets in incognito mode, Mark. Dear God, what is this third grade?

SPEAKER_27: Anyways, um, there is a composite image at the top of the story, which we had on the screen a second ago.

SPEAKER_26: Uh, clearly a, a Photoshop of Ben, his wife and several other people, one of which is Connell Harris. And, uh, it says down below photo illustration by Clark Miller for the standard. And when Mark complained about this, he tried to make it seem that they were trying to pull a fast one on people and being, being despicable. Uh, photo comps are cheesy, but they are, I think kind of standard game and making an image that is clearly Photoshopped and clearly a comp and labeled as such is, is you can say in poor taste, but it's hardly an abrogation of ethics. And I, I think that's worth saying out loud.

SPEAKER_70: I thought this image to me was clearly an illust photo illustration.

SPEAKER_71: The reason is the hats don't fit perfectly at all.

SPEAKER_09: And there's two Smurfs, a smurf version of Kamala and a smurf version of London breed.

SPEAKER_71: Like they're blue. So I did not, at first glance, I said, they Photoshopped the hats on. Now, if you saw it going by in social media, might 10% of people not see that and obviously not see the caption perhaps. So in an, in an editorial meeting, and this is how hard it is to be the editor in chief of a publication, which I was, and I think you were as well, is you have to think what about the stupidest people? What about people who just glance at it? What about cynical people? How could it be weaponized against us by the subjects? And if I was in an editorial meeting with the illustrations and they brought me this specific one, I would have immediately said, you know what?

SPEAKER_01: If I scan that or I start on somebody else's phone, you know, sitting next to them on an airplane, or I just went by my feet, I might actually think they're wearing them. Um, the hats because they did take the time to put the shade under their eyes and the brims of the hats and everything. Um, make it look comical. Yeah. Um, how the hats fit. So it is very clearly an illustration instead, what the editor in chief did here was they said, well, we technically have a caption to the illustration that says it's an illustration. Therefore we're covered. That's actually a low benchmark. As the editor in chief of publications, your job is to not pander to the stupidest person, but to be thoughtful about not ruining the story with an attack vector like this. The attack vectors could be a anonymous quote and attack vector could be the title and the subhead. And I always just thought that way, but this is made to get clicks. Putting them in MAGA hats, you know, really is triggering. And I think part of what's triggering here is I bet you for Felicia Horowitz and Ben Horowitz. This was a hard decision. I think it was a hard decision to flip parties for them. I don't think anybody who flips from, um, a Democrat.

SPEAKER_71: Yes. A lifelong Democrat to a Republican after what we saw from Trump at the black journalist conference and who is aware of black culture is African American.

SPEAKER_161: Like this is a hard decision to say, you know, Trump's race baiting, you know, weird behaviors on the margins, which he will try and defend and other people will try and weaponize truth probably is in

SPEAKER_71: the middle, but you know, you, you don't have, you know, that safety of saying like, gosh, you know,

SPEAKER_161: I support Trump when he does all this like weird stuff about block jobs or s whole countries. Like that stuff is all in play here as well. I'm sure it was a difficult decision.

SPEAKER_23: I know for other people in my immediate circle who have made the decision to come out publicly as a board of Trump, it was not an easy decision in some cases. Yeah.

SPEAKER_00: Um, because you know, Trump's Trump's no angel here, you know, as much as you might hate socialism and price fixing of these weird proposals around the grocery thing, the grocery thing is

SPEAKER_27: abysmal. Uh, but I want to say, Jason, you are making a very reasonable and I would say pro human,

SPEAKER_225: uh, demand that we have a, uh, that we expect good intent from the people that are the subject here.

SPEAKER_26: I agree. And I think that should be applied to the publication as well. I'm just asking for equal good faith here across the thing. And I don't feel like that's actually what's going on. And I just want to raise a little ironic note that a venture capital firm that has put lots

SPEAKER_28: and lots of money into companies that have taken content and remixed it and set F you to

SPEAKER_26: people who didn't like what they were doing with it is now complaining about a composite image, uh, that was made. And I think that is, um, something was another good point, right?

SPEAKER_27: Like if you're supporting regulations here about this sort of thing, but Mark Andreessen doesn't get paid from the SF standard. So it doesn't care. Now I want to ask you this, what percentage of this brouhaha is simply Andreessen versus

SPEAKER_185: Sequoia and what percentage of this complains after the story itself? Yeah.

SPEAKER_61: I'd say less than 1% of this has anything to do with the venture game on the field. This has nothing to do.

Chamath Palihapitiya: Michael Moritz has been retired for a while. He is, I think still on the board of companies, but I don't think he's making new investments.

SPEAKER_161: Yeah. Yeah. Uh, rule off and Alfred are running the company according to Sequoia's public comments. I do. So when I'm at Sequoia, I was there last week actually.

SPEAKER_00: Um, and, um, you know, I see Doug Leone there almost every time I'm there. So he's also supposed to be retired, but I think these, some of these guys still like

SPEAKER_250: billionaires and disappearing, go to your cabin in the woods, fly your helicopter upside down.

SPEAKER_161: Yeah, but I think Michael Moritz is, I think Michael Moritz is largely.

SPEAKER_00: I think he's largely retired. I don't know exactly. Um, but I, I think this has nothing to do with the venture business. I think this has to do with the fact. That, you know, Trump's first term was so chaotic and so toxic. Um, the Biden Kamala situation is so triggering for a lot of people. Socialism is so triggering that people have lost their minds at this point on both sides.

SPEAKER_01: And I had to tell somebody today, like, you know, I actually, at this point,

SPEAKER_00: I don't care particularly all that much who wins because I'm, my family and I are going to be fine.

SPEAKER_98: I, if Kamala, if Kamala wins, um, I think we'll have less chaos.

SPEAKER_01: I think she might be a little bit more, you know, hawkish and like neocon and maybe, you know, start a little more wars, um, as part of that, like establishment. And Trump won't, I think Trump might take a third term. I think Trump could be chaotic. You know, the, the end of that last president, you know, January 6th, trying to overturn the election, all that kind of stuff.

SPEAKER_23: That's pretty chaotic. And, um, but it would be good for my taxes.

SPEAKER_01: So, you know, looking at us like a mixed bag, I'm like, we survived Biden and we survived Trump. I think the country is going to survive this too. I, I don't think we can survive another three outrageously spending administrations.

SPEAKER_71: I think we got one more $8 trillion deficit left in us. And then I think we break the system. And I think whoever wins, if they, cause Trump did seven and a half trillion. And I think Biden is on track to do eight or about the same. It's basically the same. They both added a trillion to the deficit. They both, the two of them combined, doubled it. The next person comes in and then adds another 25 or 50% to it, you know, in a four or eight year

SPEAKER_161: term, depending on which group wins, it's going to be really, really difficult for America because,

SPEAKER_219: uh, our debt load is going to be so crazy. We're going to have to print more money.

SPEAKER_00: Well, and then we're going to have to start cutting services and it's just going to be this. We'd have to start paying a lot of interest and it's going to happen to California first. California is losing taxpayers. They're going to have challenges and their budget keeps growing.

SPEAKER_23: They're going to have the challenges first and then the United States will have it second.

SPEAKER_262: That's, I think the acute thing. I don't think either of these candidates solve that problem.

SPEAKER_25: Oh, no. It's a politically impossible to lower our deficit spending in this country.

SPEAKER_26: And, uh, no one actually does it. And one way that Congress likes to do this is they pass a bill and they say, well, you know, it's a headline cost is 1.2 trillion, but we found all these neat little things. We're going to close. They're going to save us 500 billion and they never do. And then the deficit goes up again. Uh, you know, those little memes on Twitter, they're like, uh, what's your most conservative opinion here? What's your most liberal opinion? And for me, it's always the deficit. Uh, I'm, I am legitimately pretty scared about it. The problem is if you're not in the U S I can just break some really quickly. Uh, if you are a, a member of the Republican party, you refuse to cut a single dollar from defense. And if you are a member of the democratic party, we've used to cut a dollar from anything else. And so between the two, uh, you can't cut anything and, uh, raising taxes is political suicide. So we ended up going nowhere. And, uh, this is why I own a lot of international stocks.

SPEAKER_264: So we'll see how that all bears out.

SPEAKER_01: Um, but I think you nailed it with that last sentence, by the way, if you own equities and things go out of control with spending, et cetera, those companies should keep going up and real estate should keep going up. The value of real estate and commodity should keep going up. Those things should still go up.

SPEAKER_23: What's going to go down is the value that your dollars and your salary. So if you can get into equities by any means necessary, start putting money away because they could rip, um, and that bifurcation is what is causing, I think the

SPEAKER_268: polarization of wealth and the uncomfortableness with the wealth gap in society. We're talking about it here.

SPEAKER_25: You know, like people always say, this is the most important election of our life.

SPEAKER_185: If we don't win this election, the country's doomed. And everyone says this every four years, all politicians do it.

SPEAKER_26: It gets a little tedious, but you know, this is like the venture election. It feels like to me because we're talking a lot more about like dynamism and, and who's going to build the future and countries and geopolitics and trade flows and protectionism

SPEAKER_27: and tariffs. And it actually does feel from a business perspective, like a pretty important election.

SPEAKER_185: I just think that, that the best, the best way to run a capitalist democracy is, uh, through

SPEAKER_27: strident and effective normalcy because business loves to be predictable. Predictable.

SPEAKER_43: Thank you.

SPEAKER_71: If we could calm the down, like, uh, you know, one magnitude, one standard deviation, because right now, like we're burning hot, it's distracting everybody. You know, the fact that we're talking about it here and we're talking about it on all in and X is filling, it's, it's filling up way too much cognitive load.

SPEAKER_00: Though the government needs to get out of the way and get smaller. I would have loved, I was talking about, I don't know if you saw the report about

SPEAKER_09: JD Vance and how hated he is. He had, I tweeted about it.

SPEAKER_161: I saw your tweets.

SPEAKER_275: Yeah.

SPEAKER_161: Yeah. I mean, it was like, wow, this is brutal. He is like literally the most unpopular VP pick since Sarah Palin. I mean, that's, that could benchmark.

SPEAKER_197: I'm sorry. She's an idiot. Like, I don't mean to be cruel, but. I'm trying to not be political on this show, but oh my God, that data is so bad. Sarah Palin was, is. The worst. The worst. And to pull.

SPEAKER_155: It's like, I can see Russia from my backyard. I understand Russia. I'm like, you could see the.

SPEAKER_09: Like some like frozen tip. Yeah, exactly. You could see the uninhabited polar bears in Russia going across the Bering Strait.

SPEAKER_287: And that makes you an expert on Russia. Oh my Lord. Yeah.

SPEAKER_110: Putting it all aside. You know, I think people are looking at this election.

SPEAKER_161: I think you're right and it's so divisive and it's taking up so much cognitive load. And it's so like, um, brutally personal that I just want it to be over. I want this election to be over. We survived four years of Biden. We survived four years of Trump.

SPEAKER_230: We will survive four years of either of these two parties.

SPEAKER_71: Maybe not eight, maybe not 12, but. Sometimes things have to break for them to get better.

SPEAKER_00: You know, I see this in relationships all the time, whether it's co-founders, spouses, friends, sometimes like that relationship breaks in some way, but it takes time to break. And then it breaks and the two people work it out either by getting divorced, not being friends anymore, or doubling down on their friendship, going to therapy, you know, do an ayahuasca journey, go on a hike, whatever happens. They, they, they go through the fire together and you come out the other side.

SPEAKER_71: I think we're going through the fire here as a society.

SPEAKER_01: Um, and hopefully we come out the other side with the agreement that we'll have less chaos. And that's why I wanted Vivek to be the VP candidate, because that would have been a great silver lining as annoying as he can be. And, you know, I, I get it. He's abrasive to people. At least he wanted to cut. A third of the spending or half the spending of some of these federal institutions. So I would have dealt with him being the most annoying guy in your econ class or, you know, the guy who interrupts everybody and, you know, at dinner parties and tells them they're stupid, whatever it is. Like, I know I get it. He's abrasive, but he's happens to be right in that one vector, which is somebody's got to get in there and fire a third of the people. I don't want to see people lose their jobs, but I do want to see the country be solvent.

SPEAKER_26: So, uh, instead of that, what you got was JD Vance, who's very unpopular and also is a big Lena Khan fan. So he's kind of the worst of all worlds for you.

SPEAKER_36: I mean, I'm literally like, I, I, and I, you know what I, I, did you read Hillbilly Elegy? I have a copy of it and I did not.

SPEAKER_71: Oh, right. We talked about this. I loved it. And I like him when he's being a nerdy. I like him being a nerdy hillbilly who went to yell and was underestimated and is really smart and well-read and thoughtful. I like that version of JD. I like VC JD too. I mean, I never worked with him on a deal, but I like that part of him. I like the smart Peter Thiel fellows and the people in Peter Thiel's orbit. I don't agree with him on everything, but I find them intellectually stimulating and fun to be around, even though they're dorks.

SPEAKER_00: He should just embrace his inner dork. Being like this attack dog, sexist, race baiting nonsense doesn't work for him.

SPEAKER_71: It doesn't work for him.

SPEAKER_299: That's why he's hated. And I'm trying to explain this on Twitter. I'm like, why do, why are these campaigns so incompetent?

SPEAKER_25: Oh, it's because they're run by humans. And have you met humans?

SPEAKER_26: I mean, if I don't eat for four hours, do you know what happens to me? I turn into like a, like a, like a tyrant dictator jerk. Sometimes I have to be sat down by my family and be like, you need to eat and not talk. And then I eat and then I am much nicer.

SPEAKER_23: But when you saw both economic proposals in the same week, 60% tariffs. And I'm going to go in and price fix groceries.

SPEAKER_01: I mean, just as a man of economics and business, who you are, who likes to read S1s, are you smashing your head on your desk going, what?

SPEAKER_27: Okay. So we're going to, if you're listening to the show right now, understand we are in a few minutes, we are going to get to a percentage of down rounds. And as they're changing and also a data point on startup shutdowns, we're going to bring it back. But in the meantime, uh, the grocery thing to me was the, um, just painful, you know,

SPEAKER_26: face desk moment, you know, beat your head against the wall. Much like how rent control is a bad idea.

SPEAKER_27: It pulls very well going back a couple episodes. You were telling me about how Trump is really good at telling people what they want to hear to get elected. That's his like secret superpower. Kamala is doing that for her party. Just to put, just to put it in political terms. I don't think we're going to get price controls for groceries because, well, you couldn't do it through Congress and et cetera, et cetera. It's a bad idea. It's pandering, but it's silly. 60% tariffs would crash. What percentage of the global economy? And also we draw unknown unknown, but, but more than single digits, like it would crash China.

SPEAKER_26: Um, and then if you think about the inflationary impact of passing along those 60%

SPEAKER_28: tariffs onto the American consumer, you're talking about the worst inflation ever. At the same time, Trump is saying that I'm going to, we're going to get those prices down. I'm like, homie, you have this crossed. Like, have you ever read?

SPEAKER_309: None of these proposals make sense.

SPEAKER_26: Like, like even the, like the, the AP econ cram book would be enough for Trump to revolutionize his understanding of economics and global trade.

SPEAKER_28: So, uh, I've decided to play a lot of factorio and, um, chillax in the evenings and stay off with cable television and it's been great for mental health. Now, uh, let's close out with two things, Jason, uh, best of times and worst of times comparison here. First of all, carded data from the financial times, 254 venture-backed clients went bust in the first quarter of this year to local maxima.

SPEAKER_103: My first thought was that isn't that many. Startup shutdowns are rising fast.

SPEAKER_161: So it was probably artificially low for some period of time because there was the never ending bridge round.

SPEAKER_71: So I had startups that did not have product market fit who would come to me.

SPEAKER_161: And so here we have annual failure rate, according to Carter again, and this is a subset of people who use Carter. So this is even worse because the people who use Carter can afford, I think probably a $500 a

SPEAKER_00: month, $6,000 a year minimum start some startups who are cheap or never make it to their seed round or the series. I maybe don't want to spend that 6,000 a year.

SPEAKER_01: All you're seeing here is when you see it in 2020, 21 and 22 be under a hundred per quarter, and then you see it spike up to 250. That period of time was the illusion, the delusion. That's where people could raise an extra six month bridge, an extra year bridge. The bridges stopped right around between 2022 and 23 when the market corrected. And then Silicon Valley bank went out in March of 2023 and then no more bridge funding. So now you've got fumes typically six to 18 months. And what you're seeing is the people who are on fumes are running out of fumes. The car just stalls. And so this is just backed up. If you were to actually take these and average them to 125, a quarter, 150, a quarter, you know, that would, uh, you know, you just basically pull the line straight. Yeah, just pull the line straight and you'll get the average and the average is just occurring at different points in time. This does not mean it's going to get worse. What this means is we're freeing up really elite talent who started companies to go start their next

SPEAKER_71: company or go join the companies that did survive.

SPEAKER_161: Flushing out bad ideas or failed experiments is a natural part of the process.

SPEAKER_71: Sometimes species go extinct because they don't evolve. And that's what we're seeing here is just some parts of the species, the week in the herd, you know, you have some small runt of the litter, they get picked off by the lions, or you see some

SPEAKER_161: runt of the litter runs faster, then all of a sudden the size of the animals gets a little

SPEAKER_36: smaller and a little bit later. So yeah, that's what you're seeing.

SPEAKER_28: So that's a positive take on that. And I have another very positive data chart to take us home. Uh, John, can we get the down rounds chart?

SPEAKER_313: I could use some positivity.

SPEAKER_28: There you go, Jason. The percentage of down rounds in the second quarter fell from 24.2% in Q1 to just 17.4,

SPEAKER_27: which is one in six. And it's the lowest in six quarters. So finally we're seeing more up rounds as a fraction of total deals. How about that? Positivity to end the show.

SPEAKER_00: Well, here's what's happening too.

SPEAKER_71: You know, and you look here, remember 2020, 2021 peaks are, you know, like one in 20 at the lowest Q1 of 2022, that's when the market actually flipped was right there in

SPEAKER_00: that first quarter. That was the peak. Um, so it was low to have a down round. A down round is you raised your last round at a billion. You need to raise more money. Nobody will pay a billion dollar valuation.

SPEAKER_23: So instead of paying a hundred dollars a share, they offer you $75 a share. Now your company's worth 75 billion, let's say, uh, 750, uh, million instead of a billion.

SPEAKER_01: Well, um, in the ensuing two years, let's say if your company grew,

SPEAKER_71: I don't know, 35% year over year. That means your revenue is double over those two years, which means if you had raised at twice the valuation you deserved, if you doubled your revenue, maybe you caught up to your evaluation. So the chances of a down round go down dramatically and you have a flat round. So sometimes if the company does survive, and this is a survivorship bias, if you did raise around, you are a strong company. The companies that didn't raise around were the ones in the last chart from the financial

SPEAKER_00: times, a different provider who went out of business. So this is what we're seeing. And it proves my point, you know, um, nature finds a way to, to go with, um, you know,

SPEAKER_116: Dr. Malcolm in, uh, Jurassic park. Yeah.

SPEAKER_71: Anybody who survived and did not get eaten by the lions or the T-rexes or the raptors, they had to be strong.

SPEAKER_00: And that's, what's happening here is the strong company survive. They raised another round and eventually their revenue catch up to last round. Boom. This is all green shoots. I think this is going to be the best vintage adventure. I, you know, as I've joked with our team internally, like the only thing our company

SPEAKER_01: has to survive our firm is me retiring.

SPEAKER_00: I, I, to deal with the amount of chaos that you showed in these charts today, Alex has been in some ways the toughest two years of my professional career. Now I lead a charmed career. I've had two rough patches. This is the third.

SPEAKER_01: Those rough patches where the dot com era, the great recession. And now those three, each one of those has been tough on me. But when you get to your third one, it's like that, um, that meme where James Frank goes in a noose and he looks over and he goes first time. First time. Yeah. It's like, I've been through this before. It's literally like first time. Like it's, I know it's going to be in the foxhole, but I know we're going to win the war. And then the question is like, are my knees and my shoulder, do I have a bum shoulder and knees that I can't fight the war anymore? I'm 53. I feel great. I love doing this job. I love hanging out with founders. Yeah. You had a great opportunity to bring, uh, six of our companies to Sequoia last week.

SPEAKER_14: Super jazz me up.

SPEAKER_01: Yeah. And you know, every time I spend time doing a podcast or doing founders, my energy and my battery gets filled and I'm stoked again. And so, you know, it's, it's been tough the last two years. I'm actually looking forward to just be normal.

SPEAKER_331: Yes. Back to our political discussion.

SPEAKER_01: Man, it would be just great to have a normal game on the field for a couple of years. Not too high, not too low. Just build, you know, I just want to build.

SPEAKER_28: Two and a half percent fed rate, 4% unemployment. Everyone's chilling. You know what I mean? Like some VCs are going more aggressive.

SPEAKER_27: Some are going more conservative. Some, I just, I want to wake up, open the news and not go, ah, you know? Yeah.

SPEAKER_71: No war with Taiwan. Let this Ukraine thing peter out.

SPEAKER_161: 906 days and Putin's an absolute embarrassment. Can't beat this tiny upstart democracy in 906 days. Like how, what a humiliation for him. Like, let that, let's get peace there. God, please let those hostages be returned to their families. Please stop what's going on in Gaza. You know, I don't want to see young people not have food and clean water. Just the people in the Gulf region, the leadership there, Saudis, UAE, Qatar. Like really stand up and like, like let's force this to be peace. It's your backyard. You have to lead this, not the United States. I just want those hostages home and I want no more bombs dropped. I don't want any civilian casualties. I'm sorry if that seems like I'm both siding it, but man, just, I don't like to see young

SPEAKER_337: people go to war and die. I don't like to see casualties of war.

SPEAKER_174: Advocating for peace is, I think, always a reasonable position to take. Well, except for like World War II, but like, yeah, I'm with you on all of that.

SPEAKER_27: Almost universally, the wars need to end, right? Yes, but sometimes you have to win them like against fascism. But, um, I'll just, I'll just, I'll put it a little bit rough. I'll just quote my friend, Jason Calacanis here as we, as we head out for the today, we're back on Wednesday, by the way, um, rooting for Putin is no way to go through life.

SPEAKER_293: I agree. I think that is a, uh, a fine way to put it. And I just wanted to say that out loud on the show. Yeah.

SPEAKER_71: And intelligent people can disagree.

SPEAKER_00: I understand some people hate the neocons. They, the military industrial complex is like a disturbing machine. I, I also hope I'm really rooting for Palmer, lucky and drill and all these other long tail of military startups. Yeah.

SPEAKER_01: I really am rooting for them to figure out how to make weapons at scale, especially the defensive ones that we need. Um, because man, it does seem like the, the Chinese and some other countries are

SPEAKER_262: figuring out some things that I feel we're behind on, but I'm no expert.

SPEAKER_185: Well, I'll, I'll just say this. Wouldn't it be great if there's more competition amongst American defense contractors?

SPEAKER_27: Yeah, just, just absolutely. That says it all because we don't have competition. That's how you get Boeing and leaving people in space. We can't build submarines and we make like one boat a year. Great job. Okay. Let's take one question here. Okay. Let's do it. Isn't there a better way of measuring fun performance other than DPI? Okay.

SPEAKER_09: There is no better way than cash out to judge a fund. I learned this from Michael Moritz who wrote, uh, at one point to the LPs of a fund.

SPEAKER_00: You know, there's a lot of different ways to look at venture funds, um, TV PI, but at the end of the day, how much money did you put in?

SPEAKER_161: What did you get out is the most pure way to look at it. Of course, you have to superimpose that across time. But generally speaking, these things last a decade, 12 years, et cetera. So you know what you're getting in for. I like the multiple of invested capital. It's called Moik. Um, and that just means how much money did I put in? How much should I get out?

SPEAKER_225: If you pronounce it Muik, you'll get laughed at, at the LP meeting.

SPEAKER_103: So Moik is the right one. I'm pretty sure Moik is it. Yeah. Uh, any other, any of these other questions seem good to you. I'll take one more. That was a fast one.

SPEAKER_27: To what extent do you think gen AI accelerating software development is real today? And is it meaningfully measurable?

SPEAKER_09: Okay. This is a great question. What I'll say about this is, um, the developers I talked to who are elite,

SPEAKER_00: you know, like really elite, uh, developers top 10% known as the 10 X developer.

SPEAKER_71: Um, you know, they've done so much that the co-pilot doesn't do a ton for them. Cause they're just so good at it. It would be like, I don't know, somebody who's an incredible pizza chef. Like they've made so many pizzas that like, they kind of hit the point where it's not going to get much faster or better, maybe a little bit on the margins, but for somebody who is a new chef and is learning the recipes, it is like dramatically better to use a co-pilot. The way I would say that Alex for you and I is you and I get value out of Grammarly or spellcheck.

SPEAKER_360: But we know about the Oxford comma.

SPEAKER_161: We know AP says numbers under 10 are spelled out numbers above 10. You just put the actual numerical, you know, version of it.

SPEAKER_71: So those things don't help us. We're already got that 95% knowledge. We know when we're doing a run on sentence, we know if we're doing a compound sentence for effect or if it should be short. Therefore, that kind of advice is inconsequential to us. We were going to make a better decision in some cases than Grammarly for our use case. That being said, as you've heard me read out loud other people's work using the co-pilot known as Grammarly, which I love and I force everybody on my team to use. And the way I enforce that is by telling them, pull up that Notion page, pull up the document.

SPEAKER_01: And then I see, if I see the little Grammarly thing floating there and the squiggly lines underlining certain sentences. And I'm like, why isn't Grammarly turned on? You've got grammatical errors in here. Shout out to our friends at Grammarly. Is that parallel your experience using things like Grammarly?

SPEAKER_27: Yeah. I was thinking about how to answer this question.

SPEAKER_26: And I think the developer to chef points really good because people at the highest end tend to code in the most basic, they code in like a notepad, right? Because they're just doing it themselves. And, um, but if you flipped it and you said, Alex, you have to go back and pick up C++,

SPEAKER_185: which we haven't touched in 10 years. I would absolutely use every single AI tool out there. I could to level up myself faster and to get help.

SPEAKER_26: And so to me, it's absolutely a great way for teams that may have developers that are more junior to make them better, faster, and therefore more economically valuable.

SPEAKER_27: Um, but amongst the absolute elite, no, probably not, but I mean, that's a pretty small cut of the population. So back to the question, I do think it is accelerated software development and you

SPEAKER_26: can see evidence for that based in how many people pay for GitHub's code pilot. Microsoft had it in their last earnings report. You can go look it up.

SPEAKER_185: It's a lot. People are paying for it because they use it. And I think that is all you need to know right there.

SPEAKER_46: Yeah. I mean, how many people do pay for. GitHub co-pilot. I wonder it's gotta be millions, right? 1.5 million paying users. I just did.

SPEAKER_367: Yeah.

SPEAKER_116: Chippity says 1.5 million paying users. Um, individual plans, $10 a month, a hundred a year business plan, 20 bucks a month. Yeah.

SPEAKER_54: I, I mean, I, I have no reason to doubt that I did. It did cite Microsoft financial reports and get hubs blog. So, uh, okay.

SPEAKER_00: Final super chat. If you do a super chat, I'm definitely gonna read it. Cause you gave us money. I have no choice. Um, Jason pick a favorite child, which syndicate startup right now. I mean, we, we syndicated podcast AI, um, and it had a really great response. I think we raised 500,000 from our syndicate. And I think I put in from our fund 250 K. So it's like a $750,000 check to a company, Alex, that I'm very proud went to founder university. We put a 25 K check in. They then went to the accelerator. We put a hundred 25 K check in. They then graduated and we put a third bet in 250 from the fund. And we, since we had strong conviction, having made three bets on that company, offered it to the syndicate. You can join the syndicate at the syndicate.com. If you're an accredited investor and, um, yeah, you know, we, we have been very select in who we syndicate. We really watch strong companies and ones we've invested in once or twice.

SPEAKER_23: So we've gotten to know the founders. We don't want to put things on there that aren't very strong. In fact, many people are asking us to put more companies out there and take more risk,

SPEAKER_01: but we really want to put out only the stuff that we've made a bet on at least once, hopefully twice or the third time. And podcast AI is just, you know, I, they, they seem to get, I don't know, some very large percentage of podcasters when they build them a website to pay them 500 bucks a month for it. And their monthly revenue has gone up pretty, uh, steadily over time. And so, um, I really liked that company.

SPEAKER_70: I think like solving, you know, a series of problems using AI and packaging it really well for an affordable price is extraordinary. And if you go to this week in startups.com, you can see the product in use and you can go to,

SPEAKER_161: I think it's podcast AI.com. So anyway, that's the one I like in recent history that did incredible. Some great moments on this podcast. We'll be back Wednesday and, um, subscribe to this week in startups.com. Go to twist 500 to see our 500 top startups. We are going to try to get to three or 400 of those done by September. And, um, yeah, lots of exciting stuff coming in the twist 500. I'm thinking about doing an event, by the way, around the twist 500, Alex, where I bring like a hundred of the top CEOs on a ski trip. To deer valley or bam for something. And, uh, get a couple of sponsors to underwrite it. So the founders don't have to pay. They get put up in a hotel room for three nights. They get to go skiing. And then you just meet the other, let's say, you know, a hundred of the 500, I think is probably a reasonable number to target.

SPEAKER_373: So look for a twist 500. Yeah. Summer camp for high-performing countries.

SPEAKER_374: It would be kind of fun, right? It would be like a cool thing to hang out at.

SPEAKER_373: That was a compliment.

SPEAKER_374: Yeah, no, that's what I'm saying.

SPEAKER_01: Like, it's kind of fun to hang out at camp with talented people. Yeah. Uh, so yeah, band camp. We'll see you all next time. Bye bye.