SPEAKER_00: Hey, everybody. Hey, everybody. We're back. I just got back from Burning Man. I am exhausted. And it's a hundred degrees here. And Molly and I lost power. We have power this morning.

Jason Calacanis: It's officially the toughest week in the Bay Area because everybody has, many, many people have come back from Burning Man. It's always our hottest time of the year. And that is no joke around here because nobody has air conditioning and our power doesn't stay on. And it's a short week. So just look for kind of a lot of chaotic energy. It's just going to be like a chaotic,

SPEAKER_06: good kind of week. Well, here's the thing. When we're exhausted, we're still great. So

SPEAKER_07: out of the frying pan and into the fire from Jake and Molly, we're going to talk about DTC

SPEAKER_08: companies. I'm joining the board of a legendary direct consumer brand that you don't know about. That's not part of the Silicon Valley diaspora. And I'm going to reveal it today on the show.

SPEAKER_09: What else do we have? Yeah, this is a very exciting one. And then we're just going to go

Jason Calacanis: full spreadsheet because we do not need to make it easy on ourselves just because we're exhausted and potentially hungover. We're talking about Joker potentially raising $50 million and a massive breakdown on a dirty little VC secret known as liquidation preferences. Super interesting topic that I have been trying to understand since I started. So yay.

SPEAKER_11: We are going to do the work and open a Google sheet and show you the impact of liquidation

SPEAKER_08: preferences. This is something that's very hard to understand. Most people just defer to their lawyers

SPEAKER_07: and then when their payday comes, their check is a little bit shorter than they anticipated. And so we're going to break it down and give you every possible scenario. If you're a founder, if you're

SPEAKER_08: an angel investor, this is a must understand, not must watch, must understand TV.

SPEAKER_09: Super tactical. So great. And as long as we're going tactical and spreadsheet and real-time math and percentage calculations, you know, we had to follow up with a little bit of gossip, a witness in the Elizabeth Holmes trial going rogue.

SPEAKER_15: Oh boy, the tea has been spilled. Columbo makes an appearance on this episode. We're going to break it all down for you. It's going to be a great, fun, exhausted episode.

SPEAKER_17: We got this. Stick with us.

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SPEAKER_24: first four weeks. Hey everybody. Hey everybody. We're back. Molly and I are both on 50% power setting.

SPEAKER_08: We've both gotten our asses kicked in the last 72 hours, but Molly and Jake Al at 50% is double any other tandem in the league. Still 100% awesome. Yeah. Bring it. Yeah. We're calling this Not

SPEAKER_09: Okay Tuesday and it's going to be an amazing show. It's going to be amazing. All right. So just to

SPEAKER_34: recap here. Molly has a fan. She looks like she's living in like the 17th century in England

SPEAKER_36: fanning herself in August. I'm wearing my resort. I'm wearing my Mexico resort wear

SPEAKER_37: because it's a thousand degrees in the house. Yeah. But looking good. Looking good. Did I say

SPEAKER_40: the lashes? I got some lashes. On fleek. Is that what the kids say, Rachel? On fleek? Am I correct? Am I used to do that? They do not say that anymore. No? Okay. They said that

SPEAKER_43: what three years ago? It was in at one point. How gentle was that? Producer Rachel, what would

SPEAKER_45: I say if they were tight, if they were locked in, if they were dope, you know, like the words

SPEAKER_08: I would use as a Gen Xer, what would be a good word for me to use to describe Molly's absolutely

SPEAKER_47: exquisite lashes? I think on point is I still use I think on really on point. I kind of like

SPEAKER_09: on point. I don't know. Nick can chime in. That's true. But on point kind of stays. It's the sillier the word, the shorter the shelf life. I like it's the moment. Like the moment.

SPEAKER_53: You know? Those lashes are the moment. Yeah. It's a vibe. I like it's giving. It's giving whatever it is. Serving. Oh, that's good. Yeah. It's giving. On point is something I used

SPEAKER_07: in the 90s. 70s. It's great. You live long enough to see yourself as a hero become the villain and your buzzwords come back in style. So I'm going to say on point. So here's what

SPEAKER_09: happens dear audience. I'm like, you know what? I treated myself because I'm on Zoom and we're

Jason Calacanis: on video every day and I just don't want to have mess around with my makeup and get like a rash from not taking it off right or whatever. I'm just, I got myself lashes. And then Jason somewhat unexpectedly was like, oh, did you get lashify? I know all about that. And I was

SPEAKER_09: like, I'm sorry, what happened just now? So it turns out I was really girling it up and

SPEAKER_08: he took it up a notch. I did. What happened was every month or every two weeks or so, a lashify box would come to our house. Beautiful package. And then we would be getting ready to go out. Oh, my wife looks great, but I couldn't put my finger on it. You know, like when somebody looks great and you're like, I can't exactly, my wife is stunning. And she stops the party. You've met

SPEAKER_07: her when she walks in. And then it's just like a whole nother level. And so I'm like, honey, you look really good. Yeah. Thank you. You know, blinks her eyes. That's it.

SPEAKER_67: She's like, I just knew.

SPEAKER_07: Exactly. And then I walk in, you know, to the bathroom at one point and she's putting, she's got like a little pair of like very funky looking tweezers with a curve in it. And she's, get out. Oh, what's going on? She's putting lashes on. And I said, oh, that's really just that lashify thing. I saw the box. She says, yeah, you know, this friend we met at this party. She's friends with this person. Sahara is doing this company lashify. I said, oh, Sahara, she's great. I remember meeting her. So long story short, Sahara has a love of bulldogs, which I have.

SPEAKER_69: And she's a tremendous entrepreneur, it turns out. So I start talking to her about her business and

SPEAKER_08: she starts relaying to me what's going on. And this woman has created a business that would put to shame 99, 999 out of a thousand businesses in Silicon Valley off of her back, bootstrap to a level

SPEAKER_07: of revenue that is beyond all, but our most elite portfolio companies in our, in our portfolio here at launch. And I said, that's great. And she said, Hey, I got questions about this, this, this, and this, and she's running a beauty direct consumer brand, but without, you know, um, you know, maybe some of the techniques that we see in our companies, just popping up her Insta and you can pull up her Insta and see, but she will do a three hour live stream with thousands of people while she puts on her flashify lashes. And she's got these all patented and, you know, incredible stuff. So I, I literally am announcing, uh, today I joined the board of flashify and I do not do direct to consumer. I do not do beauty products, but I was like, here's an entrepreneur I can learn something from because she is a literal product genius, a literal marketing savant. And, um, yes. And, uh, she's truly, I mean that, that million followers is not done with, you know, any kind of silly games. This is like done through sheer force of will. And she just innately knows how to do packaging. So when I go to LA, a lot of times I'll stay with Sahara and we will sit there, uh, and, uh, you know, have a glass of, uh, champagne or wine and eat a nice hamburger or something. And so with our bulldogs and talk about lashify and, you know, what she's doing and it's, it's very extraordinary to me. So I feel very lucky. We haven't invested in the company yet. We might, they don't need it. They're like wildly profitable. Um, but it just, I thought it'd be an interesting adventure to go on. And, uh, this will be by far and away the most successful, one of the most success top 10 successful founders I've ever worked

SPEAKER_74: with already. And certainly the most successful female founder I've ever worked with, you know,

SPEAKER_12: by a factor. Uh, and it's just great incredible. I'm like deep in the website about to order it.

SPEAKER_08: So, uh, you've heard me say many times, Molly, many, I don't do DTC. We, we, we have kind of, we have done it. I've had some amazing DTC outcomes, uh, eight sleep amongst them. Uh,

SPEAKER_57: extraordinary with smarty pants, the vitamin company, which I did personally, because, you know, it was outside the mandate of venture, but my friends, uh, created that company, uh, Courtney and Gordon Gould. And, uh, that was a wonderful outcome. Uh, extraordinary 50 X or a hundred X or something, but it's just very rare for DTC to work. And there's really two vectors.

SPEAKER_07: We've talked about here on the show. You have to have a transcendent product, like truly innovative, very distinct product. You put a look at eight sleep. Obviously it's

SPEAKER_57: that nobody's ever made a smart mattress. Uh, you did have mattress companies, Casper, et cetera, fantastic mattresses, fantastic delivery, but it wasn't smart. It didn't have this technology in it from, you know, these Stanford wonks. Um, and then of course, uh, if you ever know the smarty pants, they were the first gummy vitamin for kids.

SPEAKER_07: This changed everything. It was like Flintstones. Flintstones were like chalk, you know, and kids were like, ah, maybe, I mean, we came out with these gummy vitamins. I'd say, who wants vitamins?

SPEAKER_78: And three daughters would come running a lineup. Oh, and then they started coming to me. We didn't have our vitamins today. And I'm like, well, this is a game changer. You know, your kids asking you for their vitamins, as opposed to me lining them up and saying, you can't have dessert or whatever, blah, blah, blah. You know, having to be stern with them about taking their vitamins.

Jason Calacanis: You guys are serious about your vitamins at your house. But seriously, that kicked off. Now,

SPEAKER_81: even adults don't, won't take vitamins if they're not gummy. I mean, like,

SPEAKER_07: exactly. Yeah. And so here we are, just two perfect examples. Lashify is like, even, I think, more transcendent in that to get these lashes would be a hundred or $200 beauty experience to do them at

SPEAKER_08: home could be a $25 or less experience. Yeah. And they, when it comes to aesthetics, they are a game changer. Like, they really do make the person wearing them. And by the way, they're used by both genders. And they do make you

SPEAKER_87: incredibly beautiful, make one incredibly beautiful, make you uncomfortable on the call, call you beautiful, Molly. I don't want the HR department jumping in here, but you look great. I'm gonna say great. I better look great. I

SPEAKER_88: want to. That's the whole point. Thank you. If I wasn't your boss, I would say you look beautiful,

SPEAKER_90: but I'll just say you look great. Great on camera, great aesthetics. I'll try to keep it professional.

SPEAKER_09: It's, you know, I'm, I'm doing this because I know you're committed to a quality product here.

SPEAKER_39: Yes. Yes. I mean, look, I lost 20, 30 pounds. Piglet eyes. I mean, they just work. I mean, listen, I mean, I just, I have naturally stunning blue eyes. I mean,

SPEAKER_93: I just, you know, but I'll put Lashify on. I'll do that. Now that I'm on the board, I might do a Lashify day. We'll see if anybody notices my day. We'll see. Um, it's lovely.

Jason Calacanis: And I'm going to try them and actually even notice Manaz is like order. It's really easy.

SPEAKER_57: The, you know, the other thing with, uh, I look for a GDC companies is in a really unique ability to market. And so if you look at Lashify, you look at Smarty Pants, you look at Eight Sleep,

SPEAKER_07: you all have heard of these brands. You all have seen their marketing, whether you're remembered or not. If you pull up, if you Google any three of those, you start looking at them, aesthetically,

SPEAKER_57: you're going to start feeling something emotionally. You're going to start feeling these are brands that have really connected with people. Wobby Parker, $1.4 billion market cap right now,

SPEAKER_07: Dollar Shave Club, $1 billion exit, Allbirds, $583 million market cap now. So these are incredible

SPEAKER_08: outcomes. Those are the best, Molly, of the GDC outcomes, uh, in that range. So it's a little different than, you know, investing in Uber and Airbnb, obviously, but still great businesses.

SPEAKER_57: If you can get it early,

SPEAKER_100: but there's still only two of those too. So.

SPEAKER_15: Yeah, but you could add a zero, you know, you start adding zeros to the valuation.

SPEAKER_08: Gotcha. Gotcha. So the scale of outcomes, of course, is different for a GDC company, but you can have an incredible return if you get in at the right price. So GDC companies need to be

SPEAKER_57: valued, not at $10 million in the C round, but you know, two to five, 20 to 50%, because their outcome is going to be 20 to 50%, you know, of like some of the bigger outcomes, right? You can get to a billion or two, but you're not going to get to 10 X that you're not going to get to 20 billion. So just, you have to be realistic. Entry price matters. Yada, yada.

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SPEAKER_57: you had power go out for seven hours, I understand. Yep. You're on an hour and a half sleep. You slept on a, you slept on a pool chair.

Jason Calacanis: I slept on the deck. Yep. I slept on the outside deck. Jesus Christ. Sorry. Not all night, just like some of the night. No, I'm checking into a hotel after this, for the next two nights, because.

SPEAKER_37: Whew. Well, I mean, with the heat. I have an event in the city tomorrow night, and I was like, you know what? It's only 70 degrees

Jason Calacanis: there or whatever. I mean, I think it's 90 in the city, which is going to feel like 70. But like, we don't, this is an adaptation, a climate adaptation story. Like the Bay Area doesn't have air

SPEAKER_37: conditioning, writ large, like most people don't. Explain that, the history of that. I think it's important for people to understand. Right. Like every, you know, it's funny, like Savino this morning, our president, Mike Savino, we were on a meeting super early and he was like,

Jason Calacanis: oh, but then the air conditioning came back on. I'm like, honey, no, it's still 90 degrees inside my house because there's no, the Bay Area doesn't, we have natural air conditioning in the form of the bay. The fog rolls in and it stays relatively cool here. It's actually kind of a weird, people consider it like a climate inequality thing, because if you can afford to live in San Francisco or Oakland right on the water, you're not going to suffer the way that, you know, conquered and right. However, and this is very unusual. Yesterday, it was over a hundred in Oakland, and today it's going to be a hundred in Oakland and tomorrow it's going to cool down to like 95. And those are just, and then when that happens, the power goes out because PG&E is terrible and

SPEAKER_37: everybody in the entire Bay Area is just a GD mess because like no one sleeps. I've been here for six,

SPEAKER_122: seven years, uh, going on 10 now. And, uh, when I first got here, people were like, yeah, there's, there's a week or two in September, late August. That's insufferable. Yeah. But people generally go

SPEAKER_15: away for the week, they go up to Napa, they'll go to, you know, Tahoe, whatever. They'll find some

SPEAKER_57: relief somewhere. But yeah, when you rent a place, like our office in the city that we don't use anymore, did not have air conditioning. And in fact, they don't even have vents in some of the

SPEAKER_08: buildings in San Francisco. For heat, they have little radiators along the walls that you flip a switch on, but there's no central HVAC unit. So the building we're in that was built, I think in 2000,

SPEAKER_57: in the city in Soma, and I blocked the loft there, uh, it's like 3300 square feet. They're like, yeah, don't worry about it. We don't have AC. There's no AC on the roof. We're never going to have AC. We didn't, they didn't put duct work in the building. So the buildings in San Francisco, quite literally

SPEAKER_08: do not have duct work. If you want heat, you have a electric heater that's kind of been flushed into the wall, but it's no different than the $30 electric heater you buy on Amazon and turn on, and you're like, it's an electric radiation heater because the temperature here, I would say, is between 60 and 70 degrees, 300 days a year in the city. And in Oakland, I'd say 60 to 80,

SPEAKER_125: you know, is our range for 325 days a year. Right. And there might be 10 days like this, but now it's turning into 30 days like this that we have a 30 day run.

Jason Calacanis: And then the, the temperatures during those 30 days, I mean, they're in the, in the far East Bay, which I sometime, you know, like further out, like Dublin conquered, they're talking about 120 degrees today. Like the temperature. Yeah. That's when your grandma and your dog die,

SPEAKER_07: like this kills people and kills dogs, you know, and like pets are going to die. My two bulldogs were suffering last night. Luckily one third of the house is air conditioned. I had to like reposition them in the house to the air conditioned area. Uh, and they were panting and I was, I did

SPEAKER_08: have like, I was up at two in the morning repositioning dogs. This is after three days on the playa burning man. And you can hear it in my voice. Let's stop talking about heat

SPEAKER_134: in your house and talk about heat in your tent or your, whatever you would say.

Jason Calacanis: Well, let's be honest. Let's acknowledge there's a lot you can't say about your time on the playa. I'm assuming. Yeah. I mean, I don't want to, uh, there was a good Instagram about it.

SPEAKER_140: I mean, listen, he's dodging, bobbing and weaving. Luckily when you're on the playa,

SPEAKER_07: I'm wearing a ski goggles essentially and a bandana, uh, or a mask. So, but when I take it off, people do recognize me. A lot of people say, hi, Molly, uh, fans of yours said hi to me and fans of

SPEAKER_08: this week in startups and all in everything else. So I probably got recognized no less than 25 times in three days. And I have my mask on even with 80%, 80% of the time. Sometimes the sandstorms will come down and you know, you take it, you take a message, but just an amazing

SPEAKER_07: event as always. Uh, as I tell people, if you're into art, if you're into music, if you're into community, it's absolutely, I believe, um, the spirit of America, uh, in terms of, if you look at the principles, I encourage people to go type in the burning man principles and just spend a little time thinking about if the world worked like that. Now I'm not some hippy dippy guy. I'm a kid from Brooklyn who is totally cynical about all of this. I know I'm like, what, but radical acceptance of people is part of it. Radical inclusion. Uh, and then the other principle that hits with me is this radical self-reliance. And so, you know, I, I was lucky enough to have a trailer. Uh, and when you have

SPEAKER_08: an RV slash trailer, you know, which I would say 25% of people there do. And so what you'll do is you'll make a camp with other people. You might rent two trailers, which are not cheap. It might be,

SPEAKER_07: I don't know, a couple of thousand dollars a week, $5,000 to rent an RV in this country. Um, and they, they probably charge you an extra thousand or 2000. If you take it to burning man, cause there's a special cleaning that you have to do because the playa dust is nuts. Like, yeah, and when it kicks up, every aspect of your car is going to be covered. And so you have to clean the engine block. You got to clean the tranny. You got, you got to really do a deep cleaning on these things. Long story short, uh, you know, you'll have enough, uh, gasoline, electricity, generators, or cetera, on your camp to have air conditioning, let's say in two trailers and then 10 tents or something like that. Um, so it was glamping for me. It was easier than my trip, whitewater rafting in July that I went on. Yeah. Um, and so, you know, I'm drinking coconut water and fresh fruit. I stocked the fridge with like a ton of watermelon fruit. So it was not that hard,

SPEAKER_08: but when you're out in the desert, you can hear my voice. You are getting, you're, you're breathing in

SPEAKER_07: lungs of dust. The one thing I'll say is super notable and we can find it on the internet. I did retweet it. Um, and you can find videos of it right now and we'll show it here. Uh, we'll throw

SPEAKER_08: it in post drones. They are now doing drone shows, uh, that include hundreds of drones in the middle of the desert and they're sustained for hours. They'll do a drone show for an hour or two miles

SPEAKER_97: right now. And it's better than any fireworks. The longest I've ever seen is like 30 minutes. They do them at the, you know, at the Coliseum now. Yeah. Yeah. So now they're doing the Coliseum

SPEAKER_07: and stuff like that and they're replacing fireworks with them and they're more interesting or as interesting as fireworks right now, which is a very interesting, uh, corollary. So now in Tahoe

SPEAKER_08: and in forest territory, Napa, et cetera, instead of doing fireworks on July 4th, we're now doing

SPEAKER_70: drone shows. Yeah. This is the, just, this is the techno cyberpunk future I wanted to live in.

Jason Calacanis: It is. I am here for it, Molly. Like all of this is such it, all of this is climate adaptation in progress, like in process. Yes. Yes. And it's technology figuring out how to like, you know what fireworks don't just giant explosions in mega fire country is probably a no, but is it just as cool? And those drone shows are freaking amazing. Yeah. Hopefully our producers

SPEAKER_122: have found like three of them right now on Instagram, but they were making the burning man. If you don't know the burning man, it looks like a pagan kind of statue of a man with his arms raised

SPEAKER_07: and they burn it at the end. And so they make it out of neon and then they did a firework show for 20 minutes. It was incredible fire show best I've ever seen. And then they burned the man with this giant,

SPEAKER_69: you know, explosions. But then before and after that, they had a drone version of the burning man walking across the playa, Molly. Stop it.

SPEAKER_107: So we're driving in an art car or an electric bicycles, listen to cool music. That's like

SPEAKER_07: cyberpunk music. Like I was playing the Blade Runner Esper Edition on my art car. Yeah. And so I'm on an art car playing like the secret version of Blade Runner that never got produced. It's called the Esper Edition, if you want to look it up. And, uh, I'm not feeling much pain,

SPEAKER_93: you know, me with my love. Um, you got a little Vuv Clicquot popping. I'm like a maniac. People are like, is that Jay Cal? I'm like, yeah. They're like, oh, I saw the Vuv Clicquot bottle. It just happens to be what I like. Okay. Don't judge me. So I'm drinking Vuv Clicquot with a giant straw, like a maniac, sipping a Vuv Clicquot bottle on the playa, dressed like a maniac,

SPEAKER_69: playing the Blade Runner Esper Edition. And there's a burning man walking across the playa. That's insane.

SPEAKER_140: Made of drones. And then it pulls out a cowboy hat and puts a cowboy hat on. You're just like, whoa, this is awesome. Um, and it was great. I saw a bunch of friends and you know, like,

SPEAKER_07: like I tell everybody it's, it's a great thing to do. Um, and the principles I think are super important. We talk about flight adaptation here. You're subjecting yourself to the harshest climate in the world. I think it's 110 degrees during the day with dust storms. You cannot breathe when they dust storm, it whites out. I mean, it looks like Tatooine. It's no joke. Like you, you have to, if you don't have a mask with you and goggles, you need to get on the ground, cover yourself with whatever you have, hold a towel over your mouth, or you will start having a coughing fit. And you might need to go to the hospital and get like asthma medication or an inhaler to get the stuff out

SPEAKER_78: of your laundry. You might be hacking and sneezing black dust for a couple of days. Uh, and so it's

Jason Calacanis: very hard to go. I interviewed the CTO of burning man of the, you know, actual company. And it was such a fascinating conversation. And I was like, so basically you're, when you think about what you're qualified to do, if you ever want to not do this job, you're basically qualified to be the CTO on Mars. Like the way that she described, you know, the, the sheer infrastructure challenge of doing that. And by the way, she's amazing, right? Like a six foot, something like we're the same height, like six foot tall, Amazon, like big dreads, just like super punk rock looking. And she's like, yeah, I mean, you know, you're installing, you know, communications towers and like a hundred mile an hour winds and dust is blowing you off of the thing. It's pretty nuts.

SPEAKER_37: Anyway. So if Mars ever needs a CTO, she's the lady.

SPEAKER_07: Well, and then at night it drops down to 40. Um, and so, and you have to bring every ounce of liquid you're going to drink and every lounge of liquid that's going to come out, you're responsible for, you know, so you need to bring in everything and you got to take everything out. And there is no store. There is a hospital. If you need something, if there's an emergency, but you're basically on your own, if you run out of food, you got to go ask your neighbors. And so that's what that radical inclusion is about. Like, you know, if you are, if you have food or whatever, you're kind of obligated to, to, to give it to the next person if they need it. Uh, so it's, it's kind of beautiful. I highly recommend people check it out. Uh, and definitely read the principles and start backwards from there. And if you do go, my only piece of advice is join a camp. Don't go solo dolo, go online. I think the Burning Man website has all the camp information. And so you find people from your city. If you're in Arizona, if you're in Texas, you could find people in your city, you go meet with them beforehand and you plan out, you know, okay, I'm going to do breakfast on these days. You do lunch, you do dinner. I'll bring the water. You do the port-a-potties. I'll bring the medicine and, you know, make sure if we have, you know, emergency supplies and, you know, medicine kits and everything. So, you know, it's just, it's, it's kind of beautiful in that way. Highly recommend everybody do it.

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Jason Calacanis: Let's go right to the hard stuff. We were like, it's not okay Tuesday. So we're going to go spreadsheet. We're going to go hard on spreadsheets, God, and liquidation preferences. This was your idea. So we're going right in. Okay, here's the setup though, to where how we get here. One, Joker. So we've talked a lot about these instant delivery platforms. When we had the GoPuff CEO on, we talked, I think about how Joker, the instant delivery startup had basically pivoted to only focusing on the Latin America market, pulled out of the US market. It's now in talks to raise between 35 million and $50 million led by existing investors at a $1.3 billion valuation. This is according to a scoop from the information's Aaron Wu. Viewed a bunch of the fundraising documents that would actually be not a down round for Joker. Everybody's been very worried about these instant delivery startups. This would effectively be like a flat round, a $1.3 billion valuation compared to its most recent, which was December, which was $1.2 billion. Joker's raised $430 million so far, which includes debt, as I mentioned, pulled out of the US market after heavy losses. Even after leaving the US markets, it was still losing about $10 million a month as recently as July. And then here's where the round gets kind of interesting and gets us into a little like bonus VC Sunday school, VC Tuesday school. G Squared and GGV Capital are both existing investors and they're leading the round and have a 1.4 times liquidation preference. Liqupref. Got it. Meaning that investors are guaranteed a 40% return in the event that the company is acquired or liquidated. Yeah. So yeah, I can explain first, right? Like before we talk about timing and whether that's what they are now planning on, let's talk about how this works. Because liquidation preferences is one of those things I've read 50 million blog posts about and I just don't

SPEAKER_07: understand it. So first up, I think even before we get to liquidation preference, why did they leave the US is also a very interesting question? I think what we're going to learn right now is, and this

SPEAKER_140: is, you know, kind of goes beyond just, goes just beyond startups and cap table math. The United States,

SPEAKER_07: because of our anti-immigration policy, is unable to provide affordable labor to certain startups. And so with Uber getting, you know, people driving Uber or doing DoorDash are now regularly reporting 30, 40, $50 an hour compensation. We're talking four times, five times the minimum wage. We were sitting here but five years ago when we had a much more before Trump and Biden really closed the borders, both, you know, this is on both sides. This is not just a Republican thing. We have locked down the borders in a major way. We do not let people into this country anymore. And we have record low employment participation. 62% of people in the able body area are participating in the labor force. 1999 it was upwards of 70%. So we've had a 8%, 10% less people working in the workforce. Americans do not want to take minimum wage or slightly higher than minimum wage jobs.

SPEAKER_08: Things like Joker require entry level employees. It cannot work in the United States is my belief, unless you have the ability to pay somebody 10 to $15 an hour. Why? They can do one or two deliveries an hour. We all know that. You can only do one or two deliveries an hour and you're getting paid 40 bucks. That means you're paying either $40 for delivery or 20 best case if they do two an

SPEAKER_07: hour. And they're not doing three an hour. This is like farcical that they can get to three or four an hour. Right. So I think Americans now are going to have to get used to, we are not going to have the level of service that Korea, South America, other places in the world have, because we don't have cheap labor anymore. And if that's the way it's going to be, you know what? The same situation is happening in

SPEAKER_97: Europe. I mean, this is where it would be good to point out that the reason we don't have cheap labor is that, because we don't have cheap housing, we don't have cheap health care, right? Like if wages don't

Jason Calacanis: keep up with the cost of living in the fundamental category. So, you know, I just want to say it's not only immigration and it's not, it's a whole bunch of problems that are going to be really hard to solve and will impact our competitiveness going forward. If we let 2 million more people,

SPEAKER_07: 3 million more people into the country a year, which is what I think we need to do. I think we need to let like 2 or 3 million people into the country a year to keep up with like what we want as a

SPEAKER_57: country. Um, we, we would be able to have, I think some of these services, but you are absolutely right in certain locations, New York, California. Um, yeah. Other places, maybe Boston, places where housing is absurdly expensive. Yeah. The housing crisis definitely plays in. It's cost of living

Jason Calacanis: never plays into this. And healthcare, actually. We're almost downplaying healthcare. The cost of

SPEAKER_140: healthcare is like such a massive barrier. In the eighties, people didn't have healthcare. Entry-level employees didn't have it. And entry-level employees lived multiple people to a housing unit. And so

SPEAKER_08: I'm not making a judgment that that is how the world should be, but that's how the world was in the United States. And that's when we had delivery services. That's when we had some of these things.

SPEAKER_07: And that's what happens in other countries. So it's just the way the America is going to be, it's going to look like Europe, uh, where you just, you know, there's going to be a lower, the lowest we're going to be able to pay people. I'm thinking this country is going to be $25 an hour, $35 an hour. I think that's where we're ending up. The, the, the whole minimum wage thing is an

SPEAKER_74: illusion. Like, I don't think anybody's going to wind up getting paid that we keep immigration the way

Jason Calacanis: it is. Anyway, uh, like there was a lot in there that I'm too tired to unpack. So I'm just going to

SPEAKER_08: write it down and come back to it later. Listen, I just, I grew up in the restaurant business. You know, you could hire dishwashers who were illegal immigrants. Technically busboys were illegal immigrants. Much less, uh, much less it's being cracked down on at a, in a major way. Um, it is not the average anymore. You know, the, it's not the standard. So, you know, depending on what you

SPEAKER_07: believe, you know, I believe in immigration, I think more people should come into this great country.

SPEAKER_02: Yeah. I mean, I completely agree. Yeah, exactly. And I don't necessarily believe it just so that

Jason Calacanis: people will like bring me stuff. It'll be like, we will have a more vibrant economy. Like when you say we're going to end up like Europe because of this, you mean, we're just going to be a little bit stagnant or less innovative. I think it could lead that way. Yeah. I think it could be, um,

SPEAKER_08: only because once you up the standard, the standards only go up. You're not going to go to people and suddenly say like, you know what, we were paying your $25. Now we're going to go down to 50. It just doesn't happen that way. It could, it would take a real crash of the economy for wages to deprecate, um, and benefits to deprecate. It's really hard to do. And if we're going to lock the

SPEAKER_07: border down and we're going to have a million and a half people coming in, there's just no chance. There's just no chance to, to have that level of work, which means just everybody's got to get used to paying, you know, $18 for a hamburger, right? The idea of getting, you know, an $8 hamburger and the dishes were cleaned by an illegal immigrant and it was delivered by an illegal immigrant. And you got this great deal. That's over folks. Yep. Just pay more. You're going to have to pay

SPEAKER_78: more across the board. Now let's get to Joker. So what that means is it says, whatever, right. The only thing that will work Molly, as we dipped into unless all in is, uh, robots. Only way is going to be robots. So the robot dishwasher, there was a dishwasher startup that cleans dishes by robotic. And there is those delivery little mini robots that look like R2D2 driving burritos to places that will start this again. Cause those robots will be fine with $5 an

SPEAKER_57: hour. Right. Net, net cost. Uh, and so you don't need to have immigrants.

Jason Calacanis: We're really getting into dirty little secrets about capitalism today, people. Yeah. I mean, the reality, like you don't want to go too far down that path. Exactly. But it's the truth. Like there are certain parts of what, of the American lifestyle that cannot be enabled without

SPEAKER_07: cheap labor, cheap labor, cheap. Uh, you want to pay, you know, six bucks for an, uh, an iPhone cable. You know, it's, it's going to be made in China, but you can't have health benefits. Yeah. Can't have it all. Can't have it all. Okay. So there we are with Joker.

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SPEAKER_57: This is best explained by pulling up a spreadsheet. So we just made a quick back of the envelope here.

SPEAKER_218: A liquidation preference. Most people, and I'll make this super simple for people.

Jason Calacanis: Kudos to our team, by the way. Shout out to Nick, our managing director, Ashley, our president, Mike, who I think just punted to Ashley like we all always do on questions of really complicated math.

SPEAKER_222: Yeah. Okay. Ashley, Ashley. Thank you, Ashley, managing director here.

SPEAKER_105: And lawyers typically handle this. And if I get anything wrong, forgive me, but you can look up

SPEAKER_57: liquidation preferences. The liquidation preference, when I was an entrepreneur, I couldn't understand. I had lawyers explain it to me two or three times, and it was like, do I understand this? There's a lot

SPEAKER_08: of fancy terms in here. And I'm going to explain it to you just based on why this exists. Because once you understand the why, it becomes easy. There's a concept called a liquidation preference. A liquidation preference, it represents an investor's right to get money back before the proceeds of a sale are distributed. Okay. So let's just do this through an example. The example I'll use here is a company called Uber in its first valuation, which was $5 million. Let's say people put a $500,000 investment, let's say it was one investor, just for simplicity's sake. And that investor owned 10% of

SPEAKER_07: the company, right? $5 million. Put in $500,000, the valuation is $5 million, and they have a 10% ownership. Just keep it very easy-peasy model. The $500,000 bought 10% of the company. Okay. Now,

SPEAKER_08: if it was straight equity, they just earned 10% of the shares, and the company got sold, right? And let's

SPEAKER_07: say the exit value was $2.5 million. Well, 10% of $2.5 is $250,000. If it got sold for $5 million, well, then you get your $500,000 back. If you sold for $10 million, wow, you doubled your money, you sold for $50 million, you 10x your money, your $500,000 turned into $5 million. And then of course,

SPEAKER_08: if you hit some huge, you know, $100 million valuation, you get $10 million back, you did 20 times your original investment, right? 10% of $100 million, pretty simply is $10 million. Now, when you look at this, in the first scenario, a $2.5 million sale, the investor lost half their money. They only got back $0.50 on the dollar, right? They got $2.50. Investors don't like that idea. So investors came up with a provision called the liquidation preference, so that in that scenario, they get a minimum of their money back. And then in the second scenario, they too got the minimum of their money back because it was 10%. And that would be considered 1x. 1x times your money is the second scenario we're seeing here. I put in 500, 1 times 500,000 equals 500,000. Welcome back to multiplication tables in second or third grade. And if I got back $1 million, well, that's two times, right? So a 1x liquid effort liquid liquidation, liquidation preference means you got your money back. But VCs, of course, want to get a return. And so they came up with this liquidation preference, which means they get their one times money back first off the top. They sweep that money, they get their original investment back, that's a 1x liquidation preference, then they get their 10%. So now let's look at this based on a liquidation preference. And this is called non participative, there's non participating in this participating, I'll just do this by example. So here we go. We're now on the section in this chart, we'll put a link to this Excel. Here's a return based on a

SPEAKER_210: non participation liquidation preference. What is the different? What what does participation

SPEAKER_08: mean? Okay, participation means you get your money back. Yep, times liquidation preference, or you get your percentage return. Okay, not both, you get one or the other. And that's to protect the downside. So here, if you look at the exit value of 2.5 million, if you had a liquidation preference, because sometimes you don't have a liquidation preference. But if you had a liquidation preference, 1x is standard. So let's take the same scenario, I put in 500k at 5 million, but the company sold for 2.5. So everybody's sad, right? People invested at 5 million, they bought 10%, the company's only selling for 2.5. Well, what that means is if you had a 1.1% liquidation preference, you would take 500 off the top. Or if you had a 1.5, you take 750 off the top, a 2x, you take a million off the top, right? And you would get that at a minimum, or you would get your 10%. So if you had a 1x liquidation preference, would you take 10% of 2.5, Molly 250k? Or would you take the 1x your original investment? Which one would you take? If you had to choose? Of course,

SPEAKER_78: you take the bigger number. Now, if it sells for five, which will you take the 10% of 5 million, 10%, or one times your investment, 500,000? Right. Which would you take? Which 500,000 would you take? Right, totally. It doesn't matter. It doesn't matter. Exactly. Right. So at a 5 million dollar sale, it doesn't matter. Okay, now let's go to the 10 million dollar sale. At a 10 million dollar sale, 10% of 10 million is 1 million, 1x is 500,000. Which would you take, Molly? The 10%, 1 million, or the 500k, 1x liquidation preference? Yeah, it's my million for sure. You take the 10%,

SPEAKER_08: right? So when you do a liquidation preference, it's non-participating. The liquidation

SPEAKER_78: preference or the percentage is your choice, whichever is greater. Okay. So this creates what's called downside protection for an investor. They don't have a chance of losing their money. And if the company were to sell for but $500,000, it was a short sale, as we call in the business, it was a disaster. The company gets liquidated. It sells for just 500. What would the investor get

SPEAKER_241: who put in 500? All 500. All 500. What would the founders get? Yes. Oh, wow. Bupkus. Nothing. The founders and the team would get nothing.

Jason Calacanis: So in a... So this is just some magical thing that VCs came up with and started writing into contracts that basically means like, we know our job is risky, but we decided we don't want it to be

SPEAKER_245: risky. Well, I mean, it could go to zero and most 70% of startups go to zero. So they do lose in 74% of cases. What this was for is, if out of 10 cases, there's one or two, you know, let's say there's six

SPEAKER_08: that go to zero, there's two that return a little less than the valuation it was at, some sort of

SPEAKER_57: short sale. And then they have two where they, you know, the liquidation preference and the participating preferred doesn't even kick in, you just take your straight percentage, they would do

SPEAKER_07: that. So now to get even more greedy, you could add both of these things together. And when you add them both together, that's a liquidation preference participating. So here we go. In the case of a $2.5

SPEAKER_08: million exit, if you get your 500 back, right? And then 10%, you get both of these things. Oh my God. So you get your, you put 500K in at a $5 million valuation, you earn 10% of the company, but the company sells for 2.5. What a 1X liquidation preference would get you is one times your 500K, your initial investment back, you got the 500K back. Now you get 10% of whatever's remaining, because now you're going to split the remaining proceeds after you got your 1X back, pari parsu, fancy word for on a percentage basis, everybody gets the same amount based on their

SPEAKER_78: ownership of the shares. So you still own 10%. So the you get 10% of the 2 million remain,

SPEAKER_08: which is 200K. So at a 1X, and you look at the chart, you'll see here, we did a little formula, which you'll see there, which basically says one times 500 plus 10% of whatever it means, right? So

SPEAKER_07: you're taking that total amount minus your initial investment, right? So the 2.5 minus the 500 initial investment, and then times it by 0.1, which is 10% in a Google, in a Google sheet or in Excel,

SPEAKER_78: which means you got 700 of the proceeds, 700 of 2.5 is more than 10, right? So this is how sometimes

David Friedberg: VC founders will get a little sticker shock. Well, I thought you want 10%. It's like, yeah, but I have a liquidation preference. Right. I need to read your contract very carefully. Okay. Read your contract. Now, if you were to sell the company for a hundred million,

SPEAKER_08: right? 700K of 2.5 is approximately 30, let me do the percentage here. Hold on.

SPEAKER_07: Equal sum, do a live one here, equal sum 700 divided by the 2.5 is 28%. Okay. You see that? I just did a

SPEAKER_08: formula on the fly there. So in this case, even though the VC bought 10% of the company,

SPEAKER_57: in the short sale, they got 28% of the return. See that? Yeah. 500K, they got back. And then they got back also 10% of the remaining 2 million. So they did get net net 28%. 700,000 divided by 2.5 million equals 0.28 times about 100, you get 28%. That's how percentages work, folks. Okay. Now let's

SPEAKER_08: say it's a hundred thousand dollar, a hundred million dollar sale. Well, they get the 500K back, right? So now there's 99 million, $500,000 left. And the VC, we get their 10% of that 99 million, which means net net, they get 10.5 million. Now, if we do that same calculation, equal sum, we take the 10 million, we divide it by the hundred million dollar sale. It's only 10.5%.

SPEAKER_78: Because the 500K represents such a small amount of the overall sale value. Does that make sense?

SPEAKER_107: Yeah. So in a huge, in a large sale, this liquidation preference is barely noticeable to

David Friedberg: everybody. It's a little pot sweetener. Instead of getting 10 million, they got 10.5 million. So they got

SPEAKER_138: that 5% extra. Is that why it sort of, it can be easy to sneak it into a contract? Like it's only a big deal, you know, it's not a big deal. It's going to be de minimis. It's going to be de minimis. Yes.

SPEAKER_40: It's going to be de minimis in any kind of decent sale. You know, and we could take, you can literally look at the point at which it becomes de minimis. Like if you look at the third

SPEAKER_08: scenario here, a $10 million sale with the VC owning five, 10% and having put 500K in, well, they get back 1.5, which is 15%. So net, net of all proceeds in a $10 million sale,

SPEAKER_07: you doubled the value of the company. Well, instead of the VC getting 10%, they got 15%. And by the way, they tripled their money kind of sucks for a VC. It's not a great use of capital

SPEAKER_45: to triple your money. To be honest, like we're in it for the 10 X, the 20 X, the 50 X. So,

SPEAKER_62: okay. But I see that you have some other columns here where our X gets bigger. Our liquidation preference is more than one time. Right. And so in this case,

SPEAKER_78: and by the way, the reason most people have not talked about this, the reason you and your first

SPEAKER_07: year of venture capital have not had to deal with this is because in a great market, VCs are not asking for this because they think, well, all these are going to the moon and they're going to IPO. And it's going to be the fifth scenario of the five scenarios here. It's not going to be important for anybody.

SPEAKER_276: So if it was not important, why would we do it? In a down market, like we're experiencing now,

SPEAKER_20: what does everybody think about going to zero or zero? You literally hit the bullseye. Literally zero. Okay.

SPEAKER_08: People are scared of zeros. People are working for the premise of how do I protect my downside? How do I take as many of those zeros and turn them into one X's so that when I have my $100 million fund, if, if 20 million of my hundred million just comes back, it sets a floor, right? And then I don't have to have as many outliers. So, so this is all of a sudden how the psychology in a market can change. The psychology went from NFTs, stocks, and private companies only go up to crypto is worthless and it never was worth anything. Stocks, you know, should be valued at 15 or 18 times EBITDA. And all that matters is the free cashflow. We went from like growth to free cashflow. And then in startups, we're looking at how do I protect my downside? And you know what, this is what people in Boston and New York and DC, like VCs on the East coast, who are very close to

SPEAKER_07: the public markets than they are that, you know, crazy California private market philosophy, they would always think about these downside protections and try to put in two X liquidation

SPEAKER_08: preferences. So for a company like Joker, when they can't close around, the VCs are like, you know what, put a hundred million in this thing. And the public markets are, you know, a disaster right now. And this company doesn't have free cashflow and is burning money and only works in certain markets and doesn't work in the best market in the world, the United States. We better put some downside protection in here. So they may have asked for a two X liquidation preference.

SPEAKER_281: The founders balked at it. They didn't want to piss off the founder. So they said, how about 1.4?

Jason Calacanis: Right. And we don't know, we should be clear. So now for those of you who are watching, uh, Ashley was nice enough to make us this same chart, but with Joker's actual numbers. And we should clarify before we start that we don't know if this is participating or not participating. We only know that they appear to have, but we can do it both ways and see how it

SPEAKER_57: would, I mean, we can just do this with the participating liquidation preference of 1.5.

SPEAKER_08: Right. So here we go in that when you have 1.5, right. Or even two in a 1.5 scenario and the company gets sold for half as much, let's say 2.5 million. Um, well, you're going to get back 1.5 times your original investment, original investment of 500,000 becomes $750,000. So now of the 2.5, you lop off 750 K you have 1.75 left. You own 10% of 1.75. You get another 175 K on top of that. Boom. 925 K goes to, uh, those VCs. And again, I'll just do a quick percentage there. Uh, I'm going to sum 925 and I'm going to divide it by 2.5. Now the VC has got 37% of the company's proceeds in that sale. It felt like they bought 10%, but they got 3.7 times that 37%. Now you start seeing how these things can get legit. Um, now let's do the, you know, the great scenario sells for a hundred million. Okay. So we'll say, okay, we're going to equal some, you know, this number over here, which is, uh, 10, 750. And we're going to divide it by the a hundred million number. No problem. Easy peasy. Now you're at 10.75, right? So you can see how in a big exit, it has no effect, right? You know, it's just a little pot sweetener. The, the, uh, the, the folks at the venture firm got somewhere between, you know, an extra, I don't know where they got an extra 27% in the, in the short sale and

Jason Calacanis: they got an extra 7.5%. Well, and you're on the seed example. So down at the bottom, click on the joker example tab. Oh, actually actually ran. Yeah. She actually ran. Okay. So great. I didn't

SPEAKER_02: realize we did that. Okay. Here we go specifically. Yeah. To see what will happen. So let's say 50

SPEAKER_06: million on a $1.3 million valuation, 4% ownership. Let's say the company exits at 1.3, right? And we'll

SPEAKER_08: go down to 1.3 billion. So here we go at 1.3 billion at a $1.5 million, a 1.5 liquidation preference.

SPEAKER_07: They get a hundred and they get 50% 1.5 times 50 million, which is 75 million right off the top. So then there's 1.2, two, two, five left of which they get, you know, their percentage ownership in.

SPEAKER_57: And so they get 197.5 million, which would be four times the original

SPEAKER_288: participating thing. Yep. If they're doing the participating thing and I'll just do the

SPEAKER_07: percentage here. So if we equal sum that, um, then we're going to divide 197 by 1.3. They wound up with 15%. Now 50%, if I were to put 50 million here,

SPEAKER_290: and I did equal sum 50 million divided by the exit value of 1.3. Oh, what's that in dollar? Change that. Somebody's listening. Can you change that to percentage for me?

SPEAKER_07: Can you change that to percentage? Ashley, can you change cell D 20? Oh, there. They got 3.85%. You see that how crazy that is? So they literally are getting like four or five times. So the bigger

SPEAKER_08: the capital investment, the number 50 million is a big number, the more painful this can be. And in fact,

SPEAKER_57: oh my Lord, you know, you, you start to get to a, uh, $30 billion exit, you know, um, it's not as high of a percentage. So you can feel a little bit better at it, but yeah, with big numbers, this can

Jason Calacanis: be. So the bigger, the number, the more important it is to have a liquidation preference. And that seems to me, the more likely that VCs are going to negotiate hard for a participating preference. They're not going to want to take the 75 million, for example, that they would get if they put in 50 million at a 1.4 to 5%. Yeah. I mean, if we look at this, you know, with, uh, with a great exit,

SPEAKER_57: let's say Joker, we're able to get to, and this is not going to happen. Sorry. It's not going to get to 30 billion. It could get to 13 billion. I could see a 10 X, I don't see it 20 X, but it did. I mean, who knows? Anything can happen. Uh, markets can become irrational again, or it could be, or maybe they figure something out and they become the standard and it becomes a total phenomenon. Yeah. They could get $3 billion back on that $50 million investment, right? Because they own 4%, 4% of 3 billion. Um, and then they get that crazy liquidation preference. So, you know, it can be, um,

SPEAKER_276: it can be very significant. And the people who are putting in big numbers are taking a lot more

SPEAKER_08: risk. A VC putting in 500 K is different than some giant mega fund putting in $50 million chip. And they have other options for that 50 million. They could be putting it into a dividend company

SPEAKER_78: that pays them 4% and a company that has paid 4% for the last 30 years. And they have other options

SPEAKER_00: for big numbers like that, right? They could buy a building that throws off cashflow and apartments, like, you know, Adam Neumann is doing. No joke. We buy apartment buildings. Okay.

SPEAKER_138: Amazing. And hopefully, uh, you all followed if you, I know, seriously, I love that. This is like

Jason Calacanis: the kind of thing that Jason's like, I could do that 50%. I'm good. Let's go. Um, however, that is in fact the most I have ever understood that. And hopefully those of you who just listened to it, I encourage you to go watch the video because it's not like the sexiest graphics, but Excel does the work. Excel tells you the story. Should we do one more story? Maybe this, uh, Elizabeth Holmes one? Let's see. Here's the dish. Elizabeth Holmes is now asking for a new trial

SPEAKER_62: claiming that a key witness and former Theranos lab director, as in a key witness against her, showed up at her home saying that his testimony was twisted by prosecutors. In a court filing Holmes's counsel claims that Adam Rosendorf visited her after the verdict and was

SPEAKER_09: upset over his testimony last fall, coming to her house, basically being like, I was misquoted or, you know, they tricked me into saying bad things about you. Did you say the witness went to Elizabeth Holmes's house and knocked on the door? Um, I'm super sorry. I'm super sorry. I did not, I would never do you like that, Elizabeth. Like they totally take, took my words out of context and

Jason Calacanis: they twisted my testimony and it was all, uh, it was all a lie. So the, the court filing comes after the judge last week, preliminarily rejected the attempt by Holmes's lawyers to throw her fraud conviction out. They told this version of events that highlighted the startup's accomplishments in that filing. The lawyers talked about its 15 year history, including regulatory approval, its partnerships with Walgreens and Safeway. Like basically they made this filing that was like, no, no, no, you ignored all the years that Theranos was legit before it became clear that it wasn't going to work. And so they did the fraud to try to cover that up. But then there's this visit, this bonkers like meeting where-

SPEAKER_128: Dr. Adam Rosendorf. Yeah. Yeah. He basically jumped the fence. This guy has gone AWOL. He's

SPEAKER_317: okay. He's a medical doctor who testified as a governor. Yeah. He testified at the fraud trial

SPEAKER_74: that he quit the blood testing startup and discuss and went up to serve as lab director at Ubiome,

SPEAKER_325: which collapsed as well. If you remember your bio. Right. That did. Uh-huh. Yeah. So,

SPEAKER_125: uh, so he says- All due respect to Dr. Rosendorf, but this guy doesn't seem the most credible to begin with. I mean- He's got killed two startups. I don't know if it's his fault or not, but-

SPEAKER_327: Exactly. Well, listen- Listen, third time, the hope is a charm. Do not hire this dude.

Jason Calacanis: Be careful, folks. Clearly he's having a tough time. He said his concerns were weighing on him to the point where he had difficulty sleeping. So he shows up, he talks to her partner. You remember, she got this new partner, William Evans, that she has a baby with, and he apparently- Is her baby daddy. Her baby daddy. And apparently, Dr. Rosendorf says to baby daddy, I tried to answer the questions honestly at the trial, but the government tried to make everything

SPEAKER_62: look bad. Two, point two, there's a little list of eight things. The government made things seem worse than they were. He said, three, everyone at Theranos was working hard to do something good and meaningful. Four, Dr. Rosendorf felt he had done something wrong, apparently in connection with Ms. Holmes' trial. He wanted to talk to her, Ms. Holmes. He thought a conversation would be healing for both of them. Oh, geez.

Jason Calacanis: He further said both she and he were young at the time of the event, and these concerns are weighing on him to the point where he is having difficulty sleeping. Then he wandered away, attempted to leave the property, and was driving the wrong way while attempting to leave. He's falling apart, shows up

SPEAKER_97: at her house, is like, I made a terrible mistake, and they made me look bad, and I'm really sorry,

SPEAKER_122: and I really like you. Actually, I know what happened here. It's amazing. I actually ran into

SPEAKER_140: Dr. Rosendorf on the playa. He was on his way to Burning Man. He got started early. He had a little emotional thing, and then I saw the sunrise with him at the temple, and we both mourned. I mean, he's having regret and guilt. Come on, dude.

Jason Calacanis: This man is having terrible regret and guilt, and that does not throw out a fraud conviction. I'm sorry, but as a legal matter, I didn't think my words, I didn't think my true story under oath about how the company went would be perceived as a bad thing. She is not getting a new trial.

SPEAKER_08: I mean, if he drove the wrong way and did something absolutely... Let's be real here. We're not lawyers. We're not detectives. But you know I have seen every Columbo episode twice. I do know this. We know this.

SPEAKER_107: There's one more thing there, man. He called you, and he didn't seem like he was okay. And his state of mind, the word you used was questionable. And then he showed up at your door 15 hours later, and then drove down the street the wrong way. Was this person on any, perhaps

SPEAKER_40: some prescription medicine, well, combined it with a cocktail? And that's what Columbo would think. Right.

SPEAKER_343: I'm not saying I think that, but Columbo... He was in distress. His voice was trembling, according to the filing.

SPEAKER_81: The dude... All right. Columbo... He had his phone open to the camera, but he wasn't recording.

SPEAKER_107: He wanted to record. He's having a nervous breakdown. You know, my wife, she says, when I have a second old-fashioned, I do.

SPEAKER_104: Sometimes ask questions and have emotional responses. That's why I always keep it to one. Slow gin fizz. This kid was lit. He was lit. That's what Columbo would say.

Jason Calacanis: He might've been lit, but also I think he's falling apart. And to me, it's just, frankly, more collateral damage that she has done. Right? Like, this is... Now this guy is having a breakdown

SPEAKER_62: because he had to testify to the true events at this company and the whole entire truth led to her being convicted. And then now he's like, oh my God, I got her convicted. She has a baby. We all

Jason Calacanis: followed her. It was a cult. And he's having like a breakdown over it. And that's on her. And Sonny.

SPEAKER_40: I'm being a little harsh here. Most people in their lives do not get put in situations like this. Situations like this are incredibly intense for a human being

SPEAKER_69: to go through. To be brought into a federal, the highest profile entrepreneurial lawsuit since Bernie Madoff and Enron. This is like getting pulled into a horrible, horrible turn of events, having your whole career defined for it. Then you go to Ubiome. That's another train wreck. I can understand the amount of pressure that this puts on a normal person. This is not the CEO of a company who opted in to having this amount of intensity model. This is a person who's probably a very kind doctor who cared about people and wanted people to be healthier. And then he gets pulled into somebody he believed in is now going to spend their life or some significant portion of their life in jail. Yeah. And he put his whole being into this person's vision, which creates cognitive dissonance. Oh, my daddy didn't love me. My mommy didn't love me, but I love my mommy and daddy. That's what happens here to people. It's called cognitive dissonance. They have to reconcile. Are my mommy and daddy horrible human beings? And they don't love me? Or are they misunderstood and they do love me? This is the classic case of a child having to deal with the fact that their mommy or daddy is a monster. Elizabeth Holmes is a fucking monster. Sorry to curse. She did all of this deliberately. She did this for

SPEAKER_107: her own financial gain. She did all of this for her own selfishness and her own narcissism. She wanted to be Steve Jobs. She wanted to be important so much that she, as a classic narcissist, this is my interpretation of events and also probably courts and the juries. They looked at this and said,

SPEAKER_08: this insane narcissist risked people's lives, not only for financial gain, because she had plenty of financial gain. She came from a rich family. She did it for her own ego. The worst of all possible scenarios. This person cared about their own fame, perhaps fortune and importance in the world more

SPEAKER_69: than another human being's basic health care and right to live. The woman is a monster, a monster, and she should have the book thrown at her. But if you work for her, Molly,

SPEAKER_369: still destroying this guy's life. I blame her for this poor guy having the spell down.

SPEAKER_370: Honestly, best point of the segment goes to Marley Wood. You can give your speech now.

SPEAKER_371: It's a terrible story. And the best insight for this segment goes to,

SPEAKER_374: gonna rip the envelope open. Oh, I didn't expect this at all. Let me give my five-page speech out.

SPEAKER_69: Molly, give your acceptance speech for best point. This is the best point. More collateral damage. This person is gonna be in therapy for the rest of their life. Every conversation they have is going

SPEAKER_107: to start with your time at Theranos and be backed up only by the train wreck of you biome. This poor

SPEAKER_40: guy. I know. Sorry, I don't mean to curse twice. It's terrible. Sorry to Nick. I gotta stop cursing. It's too much editing. Okay. And John. Thank you, John. Sorry, John. Somebody send John some liquid IV so we can get through this episode.

Jason Calacanis: Anyway, I'm just saying we do appear to be, in addition to all of that, maybe there's a sequel to the dropout coming. Because maybe the story is, although again, I am not a lawyer. I would be astonished if somehow this would rise to the level of a new trial. This is not that, right? I mean, the guy made his testimony. His testimony was, everyone was under tremendous pressure working so hard to do something good and meaningful. There was a lot of pressure to show that it worked, et cetera, et cetera. All of that is true. And. Ah, look. Boom. You know how I've been talking

SPEAKER_40: about what a disaster nest is? Yeah. And I've been CCing Sundar. Yeah.

SPEAKER_08: Oh, pretty good to have 500,000 followers. Hello, Jason. Beep from the Nets team. We've noted you've had some challenges recently and wanted to see if you'd be open to chatting about what's happening. We'd really like to tap out. So please let me know if you're open to chatting. Thanks. Head of communication. Google beep at Google beep. I don't want to say the person's name. I don't want to

SPEAKER_386: pick it up. No, don't. But I think maybe Sundar is like, please, somebody go help Jake out. Oh, wait, somebody's at the house. Oh, hi, Google. Sundar's here. All right, everybody. What an amazing

SPEAKER_05: show. Molly, what else is on deck for the week? We have got some energy. It's 100 degrees in the Bay Area. The show's got some heat induced lack of sleep post burning man energy. And we're just leaning in. I listened to your interview on Sunday with the algae company. We had a great

SPEAKER_276: discussion about this. I was driving back from burning man and I decided on my five hour drive, my wife was asleep. I listened to a couple of podcasts. I said, let me listen to Sunday and really just start thinking about our own performance. This is the show, Nick, on the outro.

SPEAKER_69: You did a great interview and your interview was distinctly different than NPR Molly, public radio Molly. You had a battery of questions for the algae CEO that were very investor design questions. And I was so impressed with your level up on your

SPEAKER_08: interview skills here six months in. I mean, you've always been a great interview. That's never been a question. Like literally top 10.

SPEAKER_06: They were like journalism interviews and not investor interviews. It's happening. Listen, I'm not criticizing any journalists, but you were like, hey, how much you're charging? Who are

SPEAKER_08: your customers? The sharpness of your blade was noticeable. Instead of having a one-sided blade, you had a two-sided blade. You were cutting like a proper journalist cuts and, you know, the audience could clearly understand the business or understand the product and business. But then you flip the sword and you were using that investor side of your sword.

SPEAKER_07: And you were asking very specific things about who the customer was, the regulations, basically the questions we would have to get through in order to make an investment or any investment would. And that's what makes this program so much better than just, you know, journalists interviewing people. It's no offense to journalists. We were both journalists before we were journalists slash investors.

Jason Calacanis: We had a specific mandate and audience and focus and, ah, that's so great. It's working.

SPEAKER_07: And I also thought our ESG discussion was a really productive discussion in the middle.

SPEAKER_104: Yeah. I think what it would be, I've never had a coach on our stuff, but I would like if there was somebody who was a good coach of broadcasters and broadcasting teams, I don't know if that exists

SPEAKER_07: in the world, but if they could listen to our discussion on Sunday and say, here are a couple of pointers where you each could have passed the ball, CRISPR or whatever, but I don't know that

SPEAKER_395: exists. And we're already like, you know, a top podcast. So maybe I'm overthinking it. People call me to do that now.

SPEAKER_02: I know, but I mean, After this many years of co-hosting, but that's the degree to which it doesn't exist. It's basically just like, who knows how to do that?

SPEAKER_07: Must be somebody out there who would look at Steph Curry's shot in year eight or nine and Clay Thompson and be able to stay. If we're Draymond and Steph, like the two of us, somebody could come and say, just great, great, great, great, great. You know, Hey, you forgot this on this point,

SPEAKER_08: or you could have asked to follow up to Molly or J Kyle, or we could just do it. The two of us could

Jason Calacanis: just sit and do a post game session with the team with, with Nick and Rachel and John. Like it's actually, it's good that we would do it. Sometimes we would listen to shows back and call it just a post-mortem and you listen back and you do like a little, like this could have been a little time.

SPEAKER_07: Yeah. I mean, maybe our team, even though they don't have the experience of having done it, they do have the experience of being an audience and understand. So they might, but I don't know if they could be honest with us. They might feel a little intimidated to tell us.

SPEAKER_405: True. True.

SPEAKER_08: We'd have to give them a lot of leeway there. But I, if, if somebody knows of somebody who could listen to a Molly J Kyle interaction there and say, Hey, Steph, Draymond, here's how you can set an even better screen. You know, like I know you won the championship, but here's how you win this,

SPEAKER_07: you know, the fifth, sixth, seventh one. We're open to it. Producers at this weekend. So I'll be in LA for the final code conference with Kara Swisher hosting the poking poker game that does not exist. I can say now that I'm hosting the poker game that doesn't

SPEAKER_74: exist because it's the last one ever. We've been doing this poker game for 15 years at the D conference and co-commerce, but it's going away. She invited me to do it, but I have to,

SPEAKER_395: I have a thing. You have your, give a shout out to that. I saw that.

SPEAKER_09: I am. Yeah. I'm actually pretty excited about this. I'm being interviewed at the Commonwealth club about the shift to climate investor. Yeah. It's a, it's a big, you know, Commonwealth club,

Jason Calacanis: it's a good thing, whatever. Um, and it will be, it's as part of their climate one program. So it'll be distributed to a hundred or something public radio stations also, but talking about capitalism, saving. Who's doing the interview? The host of the climate one podcast. Oh, great. Fantastic. And there's,

SPEAKER_408: is there anybody else or is it solo dolo with you? This is me.

SPEAKER_02: It's just, it's just me. It's like an actual, like a spotlight. I know it's kind of a thing,

SPEAKER_09: but I really wanted to come to code and it was the only time I'm ever going to get it to anyway. It's like a, God doesn't get with both hands, you know? Anyway, well, listen,

SPEAKER_07: we're dividing and conquering. Uh, also I, I had a talk with Brad Gerson, my bestie BG. He's going to have, he wants to have a private event on September 15th and interview the two of us about storytelling on podcasts. Are you available on September 15th tonight?

SPEAKER_57: Absolutely. Okay. Great. So, uh, Brad, I told Brad, I follow up. Uh, so there it is, Brad, you're listening to the pod. We're doing it. We're on for September 15th. He wants to interview us on storytelling, podcasting and media. Cause it's like, well, you guys represent media, podcasting and investing the dream guests. I've been wanting to talk about this. So we'll,

SPEAKER_58: but that's a private thing. I think it's going to be just like, that's somebody's house kind of

SPEAKER_104: situation. Love it. All right, everybody. We'll see you tomorrow. Wednesday. I'll be in a hotel

SPEAKER_276: in LA, uh, and recovering from a late night poker game. I'll be in a hotel in San Francisco.

SPEAKER_415: It's on the road week. I love this. We're mobile folks. We're mobile. We can work from anywhere. All right. See you tomorrow.