E26: State of Venture Capital, plus fan questions on longevity, decentralization & quantum computing
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Sexy or something. You object to hear the poker one in network?

No, I mean this fine. I don't give IT about long geant computing.

But here's a good news, David. It's not all about you. There's four people. You could have two people who like the topic, and then .

you could just ask.

we.

Hey, everybody, hey everybody, welcome to the all in podcast. I'm chasing alcan's and with us today again, the queen of kenya, David friedberg, sends his dog in the background. Sorry for those of you who love his dog.

it's on a walk.

You'll be back and back ten years back. I'll be in the seat um and the rain man himself to its acx ultra focused on sas and marketplace startups .

and involved .

in some illegal trafficking of red pills straight up from honduras to cuba and through miami, making the red pols making their way to california and finally dad is back the stack master himself best to see the dictator is duck .

back out replenished.

been really .

firing on all cilliers.

So so you know live by the spack, die by the spack. That's what always say in this business. But you know what we have been absolutely be indicated with, I kid you not, hundreds of questions from you are loyal audience and when this thing is over, we are going on.

World tour will see you in vegas. We will see you uh uh at the royal Albert hall in, uh, london and miami. All cities are on the agenda. Let's take our first question from you, the audience, to what extend do you guys.

everyone.

doing to the questions? But I, I mean, this guy got to ask.

kicked his back. I'm doing really, really great. What about us? You guys.

you guys played poker this week.

Played poker IT was a blood bath. Well, although, you know, it's so funny because, like we played, I played, uh, a very big game the week before and then we step into our game, which is like, I think still quite big, but I could not rub two cards together to make a hand. And I I went off like a rocket ship. I just lost that someone just said.

And despite that, despite that, every time I cheatham, I were heads up at a hand, he just smashed, absolutely smashed me, smash. And then I was like, you know, i'm not gonna bullied anymore. And then I stand up to him and he's gotten up each time, uh, I was that I did check out.

I did run you over. I mean, the number of just complete plus iran on you first .

and i'm just like he's totally got my number .

two after block after after and then I showed him the not five times .

and so i'm stuck a model why and I come back and I went to use prayers. I'm just leaving IT at that.

I have lost a middle ze home and phenix.

I think you lost the badly. Okay, don't get. So let's please. H sex, did you play?

I wasn't there in that game, but I played in A L A game a couple of nights ago. And any .

celebrities.

yeah me, me sax. And are you guys don't name? No, there is one.

There is one unnamed ed celebrity. We can say a doctor. No, we can say, but we all want.

what is genre and active? Okay.

yeah, I want in in that game. But I lost, I lost a different game this past weekend. IT was a pretty .

yeah wax sex uni. yeah. I think .

he may .

be playing.

actually, beef that was unique.

Keep IT up, but we can all have them. And for being to Operations, oh, you absorb, do you l PS that you're supposed to be a separate? This, go investigate. Started up.

No, they know. I go wherever .

the deals are. Oh, really miami. What you have some coke cuban sandwich two for one that could .

be there. When even you make an investment in the miami based company anytime already doesn't happen.

Are you in the new free?

Are you in the new robot of i've invested in miami .

company have got like six yeah I well.

there are some companies that are moving to my ami that i'm ready in your maths. I both pipe right and and a part. At least the C O, the company just moved to miami.

So that's two or four, two or four best action pipe. thanks.

How do you miss that? The advertise on your show.

you L, P, B, pe that we all share, wanted everything, and he could lfg me in. And I was like, how about a slice and he's like.

L, P, me.

No, is another L P that acts. And I share who got their big significantly doused in that one. But i'm just going to i'm going to get the kid to give me at twenty five basis points and adviser share. So I am i'm getting the size .

no matter what that good luck with that. Good the trains of the station, the trains of the station do the .

company is were a couple of dollars in less than two years of its existence. And good luck with that is okay.

Well, it's we call IT to make an I don't know what you guys are seeing, but my god, early stage valuations went bonkers. I had one company that raised run IT. I have all kinds of day .

to OK right today.

We're going to do some audience questions and then we're going to do the state of VC. We're running through a deck, are running through everything that is changing right now in venture capital and early stage investing, and IT is changing very quickly. Here's a question from lennard.

Uh o music, to what extent are you guys interested in lung? In your opinion, what technologies could help us live longer and healthy lives? Freeburg just got your name on them when we start with you.

Um on this one I would a point folks to read the book life span by David's and Clair who's a research harvard and he's done a lot of kind of leading work on um uh uh basically calling aging and disease and life extension so the book life span highlights I think a lot of his research and findings and pats s forward uh for uh for improving uh uh longevity and basically you know comes down to what he defines as kind of an early switch that evolved in evolutionary biology in every cell, in every living organism, where the cell is either in growth moto repair mode and the trick is, can you get the gene to switch on that puts the cell into repair mode and if you do that, the cell fixes itself and you and the cell last longer.

The organism lives longer and so they're identified a number of genes um that trigger isn't a number of compounds that trigger expression of those genes um and there's a number of things you can do lifestyle wise uh, to trigger these genes basically to get yourself to live longer. So fasting is a good one. And then there's a bunch of compound that you can take that mimic fasting on a sale level like a metformin and rap micon.

Am I my form?

I think couple of the guys are are meat forming, right? Ah and then and then the N D plus supplements .

um which you can you .

say M N so yeah and N A D plus. Um so two compounds. N M and I like Nancy mike nci um and then and are um and those uh you can buy a product called true amazon which which has those compounds and you take about a thousand milgram a day and anyway all of the stuff laid out in his books and IT IT supports a lot of the research that's being done.

Obviously, fasting and exercise also triggered this gene expression and and enable kind of a measures of longevity uh to kind of be showing up biologically. But um I think I think it's it's an emerging field and there's a lot of deep work going on. And as people have highlighted, the the process of aging is a biological process that theoretically ally, we can stop and potentially reverse.

And there's a lot of new work is being done in stem cell therapy that may kind of uh, illicit some new path forward here. So arguably, someone is alive on planet earth today that could live past the age of two hundred. Um so it's an exciting field and and lots of kind of path forward.

Uh, i'll tell you for what it's worth, my region um god.

here we go. Third trap photo .

coming in no so so I I I do um the cut the following so um I take A A statton now IT was ten milligrams, now at twenty milligrams. Um I take metformin and all of this I take sort of in a preventative posture um because my cluster wasn't super high, I wasn't super lows. I sort of like in the one sixty one seventy one eighty, but now it's sort of like one twenty um and then met form when I take preventative vely as well and not prediabetic.

Um and then a couple of vitamin e, some other stuff. But then hear these things that I do that I think could be valuable for some folks listening, uh, there are these places now that exist, they're popping up. One company that you can check out is called renovo P R E N U V O um they are in vancouver therein L A.

There in, uh, red wood city, so ID mid peninsula for those in silicon valley. And what you can do is you can get a head to toe, uh, mr. I, so, you know, there's no radiation. You know, you can do these things, you know every other week if you wanted to IT takes about an hour.

And what happens is they can basically uh look through your entire body um your musculature, your organs um from the literally from the tip of your head all the way down to your ankles, and they can spot a lot of stuff that may not othe wise uh be seen. And so you know every three or four years to get one of these scans, you could see a lesion um you can see the beginnings of a tumor. Um you know I did one a few weeks ago that he was great.

Um there's a ranger Prices um and I think those Prices will come down. The ranger Prices are from like fifteen hundred to twenty five hundred dollars. It's not expense.

It's not cheap, sorry. Um but here's what they're able to do. They're building a corpus of all these images where they're running uh machine learning on IT and they're getting Better, Better at identifying anomalies.

And so as a result of that, they're able to actually take the MRI images and they can do fewer and fewer scans to get the equivalent resolution. So two things will happen. One is the scan time will come down, right? So IT was an hour and a half.

Now it's sort of right under an hour. IT can probably be as low as forty minutes, which is relatively tolerable for most people. And then the cost will come down into the hundreds of dollars because you'll be able to very rapidly assess.

Um so I do that. And then the second thing is for anybody with heart disease in their family, I really implore you. One of my friends actually is flying down from toronto to i'm taking him to my cardiologist in L A.

And there's a thing called heartsore. And what heartsore is is a contrast CT, which basically means they inject to die. And then they put you under a CT and they they map up your heart and you can literally see the calcium build up. You can see the state of your arteries um and you know what probably people don't know is when you have a calcium score you know most of us is zero but when he starts to be none zero IT doubles every year and by the time he gets into the thousands, you're basically guaranteed to get some form of cardiac issue um and so IT doesn't seem like anything if your cardio core is twenty, accept IT goes to forty, eighty one, sixty and all of a sudden within five, six years you're really in the red zone for a heart attack or something um i've done at twice now um every five years I do IT um touch with, you know my my cosme scores to zero um but in any event, uh that's what I do for longevity. I kind of preventative vely at the cellular level with some drugs and just trying to catch cancer and heart disease on the front end and otherwise eat three baLanced meals and exercise and sleep.

You obviously don't care about long. And he thoughts here.

I mean, sax has looked like he a thousand years old sins.

He was seven. No, he was when he was in two of grade. He d looked like he was a vice present .

in the states. Just let me know when this conversation is over. I've been doing my email.

So great .

right that I end my life now. I feel like I just last .

two years right now.

Sax has got an early spot both on the rocky ship to mars and he's got an inside VIP to Peter tells blood boy project. And so either way, he's getting off the planet or he's gonna refresh blood or both. So he's good or I action bias asks, please debate the centralization of monetary value, ultimate threat for insiders power lotion.

I interpret this as a as a bitcoin question. So yeah, I think one of the most interesting things happening in the world today is this is what's happening with bitcoin, right? And you're seeing the Price go up because a bunch of institutional investors on wall street are all getting into IT.

Now it's gone from retail to institutional. And the narrative basically, it's a really profound narrative, which is it's the separation of money and state. So if you think about like one of the most important events in human history was a separation of church and state where we no longer look to the state to determine, you know, what religion everyone is going to be.

Well, what crypto is introducing as this idea that the government cannot control the money supply, I think that we is talking about with the the centralization is that you could have a currency that everybody in the world beliefs in that no government can control. That's the separation of money in state. Now this is just really a narrative right now.

Um I mean, and who knows if we will actually come true, but the interesting thing is that if everybody does believe in IT, IT will come true. And so big pointman sort described as the bubble that ever ends because if everyone kind of buys into this bubble, IT actually comes true. So I think it's very interesting and you're seeing um because bitcoin is kind of perceived as the antidote to inflation and money printing by the government. Um I think you're seeing to take on new urgency now because the government discuss printing trillions and trillions dollars of of new money.

Doesn't that threaten governments of government um doesn't have control over monitoring financial transactions and have control over the accounts in which the financial asset set, which is effectively the notion of central alive anonymized wallets then um how does the government secure taxation which is required for their ability to fund? Well, the good, the fun, the state, right and so what happens to the state?

Well, there's an enormous amount of leakage that happens today in assets that actually get financial, zed. But in the grey market, and I think the the beautiful thing is on the one hand, you know, we become less focused on like the m one and the m two money supply, like the physical printable distributable money that we can see in touch and IT gets replaced with virtual currencies that are tied to other things.

I think what the the the person who wrote the question is asking, reality is more about defy and what's happening sort of like on the theory, you know two point O R C, twenty contracts, all that stuff, which is sort of much more next year. I think that bit going. And I think at some point we should deep dive into IT.

But what I would say freeburg is all the leakage you have today goes away in a world of defy because you will financial ze every single asset possible, you will financial ze your homes, you're financial ze your cars, your watches, your jewelry, your art, your financial ze every random thing, maybe your career, and how people will trade IT absolute to your career. And and the thing is by by monetizing IT and financial zing IT, you can borrow against IT, you can trade IT, you can pull forward value into the future against IT, but it'll all be tracked. And so as long as a government then says, listen, we're going to enable IT all but there needs to be an off Frank of taxation. And that's pretty simple because a physical house exists in the world, you can't hide the .

existence of a physical house. But it's I saying if IT isn't anonymize, that the government can track .

IT and the government but these these are two separate things. Some assets will live anonymous ly, and those are the assets that don't need to exist in the real world. But I think what this will create is a world where all of these assets that actually really exists in the real world, it'll be fine, that IT exists and that people get tasks on IT, but it'll be much more legitimate.

And I think it'll be simpler. And so I think people will trade off incremental taxation for incremental monetize ability. I'll give you example um let's use real estate. There is no reason why every single piece of land everywhere around the world isn't written into a ledger with knowledge of who wants IT, such that the person that wants IT credit could borrow against IT sell I T fractionalized. Even if you can francon ize in the real work.

because your neighbors won't let you set IT up into four lots, you could do that online.

online. And so today I will happen. Know that person has a level of wealth. And what they do instead, take the united states is the lobby, lobby, lobby to create all this convoluted real estate taxes to make their life simpler. But if you actually unlocked at the ability to focus on revenue versus expenses, you just wouldn't focus as much on the taxation because you say, what I can make so much more .

money if you judge. And just, you know, sort of answer the question here from the from the reader, from the listener. I think you can really judge this based upon how much is being pumped by the people who owe IT. And they are absolutely dogged religious about this. It's like talking to and you know, person whose you know met jesus.

And now everybody has to be a Christian um and you can also look at uh the people who are posing IT I don't know if you saw yelling um and then um Chris the guard SHE came out against IT Ellens come out against IT india I ban IT and then you have obviously, china is coming out their digital ones. So I think it's going to be there is going to be a dog fight here where governments are not going to easily give up. They are control of this.

And there's many ways they can make a bunch of red tape to slow this down. And in countryside authority an they cannot right? Ban IT take another question.

By the way, there's like three outcomes here, right? I mean you can either see bitcoin, for example, you being banned and and that's gna be ugly um and and obviously, there would be significant financial loss at this point to sexes point at some point there's so much as a value tied up and bin, it's too big to fail.

So I David band by who oh that .

that's from chinese government. This this is what they're trying to do on some of the same right, and they're going to make an illegal for citizens to transfer money in and out of the asset class.

And I think I think it's a bigger threat to countries that I want to impose export or currency controls and export and instructions. But but Frankly, if you're a country that's not afraid of currency movements because you're not trying to do showing impressive your people, I don't think you have that much to fear here. I mean, there are other ways of trying to hide access or hide money besides bitcoin.

And every transaction, every bitcoin transaction is written into the leger. I think if we pretty dumb to try and commit a crime with bitcoin because there's going be a permanent record in the blog's chain forever of that transfer. And then there's companies that, that provide that you kind of a su thing and try to you know unravel using .

tax evasion in the united states is going to be difficult um with the in if I A crew, a bunch of value and bitcoin and I going to be able to evade paying taxes on those games and convert that big bit point into physical assets by just sing IT from another bitcoin wallet holder.

I mean how how .

realistic gets taxi varian gona be uh and how much? Because ultimately us government most well so you .

can convert cash to bitcoin and then you want to sell your bitcoin at some point you're going salad that mean there be A A, there be A A, A realization.

I think, transferred to a seller of an asset of another asset that willing to accept bitcoin in receipt. And so too anonymized wallet.

I know. I mean transactions on the block chain forever and it's going to live in the books of whether the cellar is, what are they selling you, a car, a house, whatever. I mean that that transits a watch. I mean, look, if it's a personal item, maybe, but if you're talking about a substantial asset like a house or company or something, they're going to need the other side, the transactions get to need to report the realization event. So you're going have to have two people collude to engage and taxation ation seems like a really stupid thing to do.

Legally, incorporated businesses are going to be Mandated to do effectively identity verification, much like we have to do under the pay trade act. With all the the natal .

totally yeah ultimately .

the compromise arises.

right? Yeah, i'm not i'm not worried about I I feel like this whole like silk road type, but I will be used lately thing is like kind of a old meme about IT that I think that the fears are like great league.

But the thing that jumps out at me about all the critics of bitcoin and i'm not like a pump er whenever but I do own some um is the thing that like all these like critics don't seem to understand, is the technology that's a common on or whether it's like Howard Marks are warm buff or charlie mongers ever there. They're all like great investors or whatever, but they're not technologists. Pot is applying spot.

And the thing they don't understand about the technology is that bitcoin is the first digital asset to ever be created that you can create infinite copies of, right? So think about like a song or a photo or a video or anything that's digital, you've always to make an different for number copies. Isn't that what the word digital means that it's infinitely copyable.

So how do you have digital money that can just be infinitely copied? Obviously, that would destroy the value. And that was the genius of bitcoin, is that every transactions written into this ledger, the blockchain is decentralized.

And nobody over the last decade or so has figured out how to counter fit bitcoin, how to make a duplicate, how to double spend bitcoin. As long as that remains true, then bitcoin can serve as money. If everyone believes in IT um the day that someone figures out how to counter fit of bitcoin, how to double spend IT. It's all worthless, but a lot of people have been trying over last ten years.

You've never forget out how to crack, by the way, that's a it's a great .

transition of the next. No, it's a perfect transition. And next up ideal says can one of the best is explain the power of quantum computing and how I can change industry like medical, pharma, ticals, any other companies that are leaders in want to .

community uh H I i'll take a cut of this one so um and the reason um I pointed that out is because a lot of people do talk about quantum computing. Uh potentially being a path to cracking the hashing functions in bitcoin mining and potentially overwhelming the network and effectively counter fitting the the bitcoin uh leger um and so uh technically uh a quaint tum computer a computer that uses cubits, uh which is A A A storage of a quantum state verses a storage of a binary state which is uh A A A binary digit which is called a bit in traditional computing, classical computing, a one and a zero, a one and a zero and a quantum a cubit, a quantum state can be a much more dynamic function. And so it's it's a state that is uh very analogue and very representative of of a much more kind of broader condition than just a one or a zero.

He could be a one, a zero or neither right? You can have neither state is about IT as a way function and um and so a cubic can only exist in a in a piece of matter uh where you can hold the fidelity of a quantum state meaning you can be disturbed. So right now all quantum computing gets disturbed t IT all has some error prone uh context to IT.

And so in order to use cubits to do calculations, we use what's called quantum error correction on those cubits. And so we are just the the cube and the output to try to resolve IT. Um a cubit with no errors is called a logical cubit and ological cubit has not been built. IT would require very, very, very low error rates. Um and there's a bunch of uh and and there's a bunch of periods around when this is gonna en, when we gna have truly logical cubits, when does the air rate get low enough that these cubes are are truly kind of useful.

Now there is an estimate that the number of logical cubits needed to crack R S A twenty forty eight, which is the the big cut of crypt standard um which could cut of break the whole crypto currency model um IT would require about four thousand and eleven logical cubits um today the largest uh the largest quantum computer has about a hundred cubits that are very noisy and so it's less than one logical cubit and so we would need somewhere between one hundred thousand and a million cubit computer to be able to have enough quantum um supremacy to be able to tackle a project like cracking R S A twenty eight and and by some as of its and some people have tried to estimate when this would happen. And the estimate currently by summer researchers is that this there's a less than five percent chances happens before the year twenty forty. So we're talking in somewhere in between the year twenty forty and the twenty sixty when we get A A quantum computer that has enough logical cubits to be able to crack a problem like um you know R S A twenty forty eight and basically make all crypt to fail.

And between now and then a lot of people are working on quantum crypto phy, which is new methods of encysted that are kind of built for the quantum era on the quantum frontier. Now what's more interesting is that over the next year, next ten years or so, the current super noisy, super low fidelity quantum computers can be used to simulate quantum states, which is the condition of Adams and molecules, and use that to do Better modeling of physio chemical properties of material. That's where the breakthrough will happen in the next decade.

So all the hard, discrete problems that we kind of theorized about, cartography and other stuff that's decades away in this decade, we are already going to start to see quantum computers have breakthrough and how material, how Adams s and molecules with each other, for example, finding proteins that can do a Better job of having an anthea's reaction in the physical world, where we can now potentially pulled nitro gen n out of the atmosphere to make fertilizer or or drugs or um or specific protein targets that can go in the human body and have specific functions by modeling what we can do with traditional computer today, modeling the quantum properties of those molecules and how they interact with other molecules, and then building really cool predictive models that we can then turn into the products. And that gonna chase really hard this decade. Everyone's going to be going after IT um and we already have enough computer power.

I don't think there is any leader in quantum computing today. These are all still science experiments that all bread boards, IBM, google, microsoft, a bunch of research adds, a bunch of startups are all kind of basically doing the same thing with different types of cuba technology. But they all have very high errors. They all have very low cubed computers, and so it's still unresolved who do not come .

out with company, two companies to follow R D wave, which was started in ninety nine. So just to give you an idea of how long people have working, I said twenty two year old company. I know h Steve java has been backing IT for now in its third decade. And then ironic is that the other one I O N Q I .

think like antm computing is like fusion yes IT is like a technical problem that is attracted people who've had more money than common sense um and is just basically a way to burn an enormous amount of money over twenty or thirty years and the problem with that is that you start to build in technical craft anything that is still in R N D faced twenty years in needs to get scrapped and rebuild from scratch because everything has changed, including the people. Even the twenty year old that started are now in their forties and have kids and .

just have a complete and great.

And so like, you ve gotta just scrap these projects and start all over again because the the problem is you need somebody completely naive to look at this problem in twenty twenty one and say, well, OK, how are we actually going to really solve like the coherence problem? I don't know. How are we gna build the gates? Uh, I don't know. Uh and you have these very um formula ways that we knew based on what technologies is are available in ninety nine or two thousand to start with. And I think that's probably part of why we ve frame the problem as largely sort of this thing of like okay, maybe there's like a into your factorization thing you can do and it's like, I don't know, I am i'm deeply sceptical.

Yeah well, I agree.

But this is why so I want this is why alph ld beat quantive computers to the solution of protein folding. Uh, and and the reason was they were just like we'll just take a different run at a completely different people, a completely different technical framework and modality and a completely different .

risk profile and age as well a company to keep an iron in the fusion space, commonwealth fusion systems like about mom guard.

what you say, what is going to say is .

that the main thing I was thinking about while you are giving that dissertation on cubits or god, is what .

is is I would .

never invest in this. That's all .

I was thinking, is I would never invest in this. Yes, five ages.

And these are science fair experiments, you know, with indefinite time frames. This is basic R N D that should be done in universities. These concepts are not for commercial.

exactly what they said about A I. And then now it's .

infected in every company. So now, pete, completely disagree with you because, okay, there there is a practical commercial revenue generating opportunity for A I and machine learning, literally from the start of computing .

IT IT took several generations. There's no use .

case for fusion energy.

I mean, of course, there is partially grow you.

Jason, that I was not investing in A I ten years ago. I thought at that stage IT was still in the romal science fiction. But we just announced two deals last two days to c deals viable, which is basically an AI voice of the customer IT sarps in all your customer feedback and then gives you answers and then .

the other one .

is a copy writing one is a coffee or writing A I called copy dota AI.

which literally .

writes your, yeah we might give you a size and not me so skeptical but yeah but but here's here's was changed right? Is these are c companies with this, a handful employees. They're built on GPT three.

So you had this like basic, like R, N, D. done. IT creates this platform .

called GPT three.

Yeah, you can now build companies on top of that. So I mean, look, you know what I invest in or the commercialization of of of new technology waves. Um those technology waves happen because of deeper R N D to think about vrar .

because that this is the same conversation of V R N A R. Like are these were the investments or not?

I think I think sexes point is such a good one because what what he's saying is um is what I think has happened over the last century. The government the best role the government can provide is to take on that technology risk, that large capital and technology risk. This was the case with the hat project, and we got nuclear energy activity.

IT was the case with Apollo project. We have the space industry as a result now, and it's what happened with the human genome project. And now we have an incredible genomics revolution and arpanet and and that that expensive early stage d risking requires an incredible amount. Capital is very low. Returning IT doesn't return anything, is what xing is later is is the the commercialization?

Where do we have A A A hurried c and theory, a best practice around when something goes from a research project to be in commercially viable. And there are signals. I mean, platform, platform vacation seems like one that pointed our David is a platform and you can use IT easily.

yes. I I think I think you can tell when the amount of capital required to get IT off the ground goes to something reasonable like a few million dollars, I supposed to hundreds of million dollars whenever. And Jason, you've talked about this, that any company that's trying to raise hundreds of million dollars or you know has a billion dollar plus like evaluation before shipping a product is presumptively fraud.

There's still too much R, N, D involved. I mean, look, venture capital is a small milestone based investing model. You take a little bit seed money, you create a prototype, you get some proof.

Then you race series a, you get ten million, you get some customers that you raise twenty five million and you scale the company and is based on milestones, is actually a very efficient way of investing. And when somebody wants to skip over all those milestones, they say, no, we need hundred thousand million. In order to launch this thing. You have to ask, why is this is this .

idea really ready for .

commercialization to revenue?

You've done deep tech like there's a role for venture capital, private market dollars. Yeah.

i've I i've done a lot of deep tech investing and my whole thing was i've always looked at at the point where something is completely deserted technically and it's about then the exploit of a market. Otherwise it's exactly what David said. So will give you an example um a company called relativity space, now the second most valuable private spaces file company after spacesuits.

Okay Y C company I D like the series. Um what were they trying to do there? They their stated goal at the time was we want a three d print the entire rocket and the entire engine.

And I said, oh, okay, well, when we did the math and we try to figure this out and have the same launch capability of space sex, all of IT comes down to, okay, well, how do you want to A D risk this? And what tim and Jordan's first idea was, well, first, we want to basically prove that we can actually get a certain printing capability done because you're talking about this extremely, you know energy intensive, extremely technical printers and effectively writing printer drivers, right? And to be doing IT at a scale where you can hand that off to NASA and they can take that engine literally strapped down with chains, call the whole down test, fire the engine and say, IT works, doesn't blow up, doesn't blow up.

And I said, the team, how much does that take? And team was like, I could probably do that on ten million box. I said you're done on ten million dollars .

yeah and was a hundred million .

hundred now the only person that would have written a hundred million dollar chapter to s that doesn't understand and what they're trying to prove at that point in time, because what he was trying to prove was the the ability to use the printer. He wasn't saying, i'm trying to build the next generation rocket motor, right? So similarly with virgin, you know, virgin, got to a point, works like IT had flown demonstrably in the air.

So what did IT prove? IT proved the flight profile work, improved the engine work. IT proved all the navigational components work and improve the safety envelope work, which means that you could basically act as a glider under all kinds of boundary conditions. That's an enormous amount of technical progress. And then at that point, they are willing to invest billions.

dollars and point you have to have in your model early too, like that. One of the things about being an entrepreneur s figuring out how you stay alive while you answer these questions. And you came up with a brilliant one or whoever was doing virgin collected, which is people will overpay .

a virgin was a your process where rid brands into his credit did exactly what David said. Here's ten million dollars. Get to milestone one.

Here's twenty five million dollars. Get to milestone two. He did the exact venture capital model is just that he did IT by himself. I think what David is saying, which I agree with this, you should never short circuit that and say, here's five hundred million .

dollars per series a just go away leap.

You'll be working at something for twenty years with nothing to fuck and shelford as in fusion as in can you .

alright you enough with let you end up with A A magic leap .

or theos serono .

or there no fa IT looks .

like it's a fraud, but magic leap just looks like it's technically incompetent or it's too .

of a technical problem to solve in the amount of time in the amount .

technical incompetence. Well.

I don't know it's incompetence, might be IT might be a twenty year problem is supposed to have .

what you taking this emotionally technical incompetence is the opposite of technical confidence, confident you can do IT technical income.

You can. You are saying that that group of people .

is incompetence, saying the words the dow by the wording, competence, technical incompetence.

Okay, when you're saying and i'm that you're describing the person, not the problem.

IT could have been too hard to live for them. So you okay.

But the last question is about access to private quality. But let us go into this deck here. Now one of the things we anted to talk to today is uma had a good idea. Venture capital is changing rapidly.

Um the last decade has seen more changing venture capital than I would argue the four decades or five decades adventure capital has existed in all the words more change um and we going to go through some of those changes. How would affect the entrepreneurs, would affect the investor. Tramp was nice enough to put a deck together and then I guess.

Jason, i'll figure out a way to post this into the youtube or something like that yeah.

you know what will put in the show notes a link to this google presentation and nick in, pull up the slides when we're something about .

I think I think if folks can give us feedback, this is kind of a new thing for us. We're trying to experiment, which is sort of this is like a half teaching, half discussion on something we all wanted to talk about. And hopefully you guys get some value from IT.

But h tell us if it's not so. Uh I I want to think, uh, caron Collins on my team will help put this together, but let me just uh go through the state adventure capital. Um so uh a couple of high level points.

There's like some really important transport. The first is that there really is now underneath a massive change in the players in this game, a founder. Demographics are changing slowly batur.

Ly, we're going to go into that in the second, traditional V， C investors are getting disrupt IT. We're going to go that. We're going to go into that. Um and then this bottle which I love of, let me know how I can be helpful quote on quote um basically eroding um and seeding ground to what we call solo capitalist and will talk about that, which is probably the most disruptive trend inventer.

Second, we will talk about the inflation in the amount of money that's going into these companies, which really means more money at higher Prices and why that's good in some ways and actually bad in some other ways. This goes back to David's point of you know not being forced to to generate milestone sooner. Uh and then the third is that it's really now a founders market.

And I think this is really important because you know you seen an enormous amount of delusion and lack of control for founders and employee teams and companies. And I think that there are some really disruptive new ways that complete the use, serve traditional venture, non delude forms of financing will talk about that. So let me just levels set for you guys.

I asked the following question, what are the demographics of the united states? And here's what they are in the united states today. Fifty nine point seven percent of people are White, non his panic. Twelve in ha percent black, five point eight or asian, eighteen pots, seven percent of his panic. And two point three or multorum.

If you map back to VC founders, seventy seven percent of VC founders are White, one percent are black, seventeen point seven percent of asian, one point eight percent of hispanic, and two and a half of multiple. So amongst mult race, asian and White, you either are at or over indexing your representative population. And blacks and espana s this is not anything new, but massively underreport ended.

If you take IT from a gender, females have lower representation among founders, but it's growing. So the U. S. Is basically fifty, fifty male, female, female founded companies were twenty three percent of all deal activity in two and nineteen that's pretty good um up from twelve percent in ten, although racial diversity is still pretty lacking, which we know. And then the Young tech Brown stereos type is cracking uh which is this is incredible. Twenty nineteen study in the times show that the average age of a tech founder is David is as what you .

think that is the average of .

a tech founder mean or average mean. I saw was forty.

forty two. No, i'm saying a lot. I think I don't know. Just deposit for a moment what we can still find the company you can what do we think is given you had the longevity question earlier and then you have people, you know generating wealth and starting companies in their forties, fifties and sixties who then underwriting themselves right up until they get to product market fit, then raise money, what do we think is the best zone for an entrepreneur in terms of having a great outcome?

I've always thought that the look I when I hold, I was thirty one, thirty two when I started social capital. Um I mean this is a multibillion dollar enterprise. I feel like i'm reasonably successful at IT um but I was preparing for the first thirteen or fourteen years of my professional career.

I learned some good things. I learnt some bad things. I learned tactics that worked. I learn strategies that didn't thirties or forties or well never in in my experience for me and then I think it's for personal for everybody. I was best position to know what to do and at least iterate in my thirties. Um and I think in the absence of an idea that has some network effect or something that sort of like supernatural outside of your own control, I think the older you are generally probably the Better prepared you'll be.

Yeah, I agree. I mean, I did pay when I was still in my twenties, but I wasn't the the founder of the company. I was recruit to the earthly stage.

I didn't really start hammer until, well, I guess I started the predecessor company, gene, when I was thirty four. And then the amar pivoted into emma when I thirty five. I mean, like a good level preparation. You know, unless you have a spectacular idea for a startup, you should probably get some experience first .

hundred percent freebody. And any dots there on what's the killzone best time to launch .

companies in your mind or investing? Gn k. Larry, bill gates, they started write out of college or at any experience. But um I mean I worked that I I had two jobs uh in tech before I started my first company two thousand six um and so I had a lot to draw from and that really inform me. But I think everyone's different.

I mean some people, if you have the idea, if you have the idea, by all means.

to do IT in your twice. But I am far the greatest kind of like. Asure of weather. And when you kind of prepare for this is your ability to continue learning. You know, continue is learning to me is is one of the greatest predictors of entrepreneurial success.

And all the guys that have wasted for decades for basis to zc, to arian, you know, they were continuously evolving themselves because they were continuous learners. Bill gates, the gates is the penultimate example of this, right? I means, guys, we invented himself thousand.

That what you said is so important, i'm going to change my answer. I think I started social capital when I was actually the most able to get out of my own way and learn, continue. Yes, yeah.

you know, thing add to this is is so much easier to be a founder now today that I mean, look, I I remember I joined paper in one thousand nine ninety nine, and I was my first start up. IT was like, really hard to get into an entire ship in the ninety nineties. Know the VC had tremendous power and control.

They would routinely replace founder ceos. You know, everyone had to go to sandal road to get capital IT was hard to even know how to network your way to send her road. IT was this much, much harder to be a ffo der. As much harder to raise the money was hard to know what to do.

And then I think actually, one of the things I really change things was with blogger emerging in the m two thousands eight litter proliferation of information, where now, you know, other founder started blogging, investors started blogging, and there became a wealth information out there so you can learn how to do IT. And then, of course, you had incubators and so on, like yc. So they became more of like a playbook for just like how you actually get a company off the ground.

When I graduated law school, which was one thousand nine hundred ninety eight, I knew I want to get into business and on for newera. I really had no idea how to do IT. And if IT wasn't for a phone call from Peter till i'm not sure I we've gotten into IT, you know, but now now everybody knows what to do.

Can I ask your question then? So let me, let me give you start to ask your question. What do you think that story would be, David, for somebody that wasn't a White man? So here's here's the data. The percentage of female V, C decision makers has grown by more than two x.

Uh, what that means is about firms over a billion dollars, about a quarter of them have at least two plus female decision makers, but sixty one percent of them have zero, and eighty percent of venture firms still have no black investors. How do you corporate or intersect that idea of ease of starting a company with the pattern recognition of those folks and the inability to sort of maybe map to people with black skin or women? I mean, I think that .

would slow valley in what venture couple represents opportunity, right? And we have to extend that opportunity to as many people as possible. I mean, that's really the the key here is we do need to make IT as widely available as possible.

by the way, to much I mean one way of slice things is the perfect tage of uh diverse representation within the ranks of adventure and pride equity. Um but there is a equivalent scaling in the number of venture firms and the amount of venture capital since 一楼。 And you and I and all of us kind of entered the technology industry kind of early two thousand um and the number of firms that exist today that that are kind of micro firms and scale firms, I think presents um a much larger set of opportunity. You're right, there are still uh standards um and there are still chAllenges and diversity and kind of um having access uh but there is so much more access than there has ever been um and that's really changed the landscape. But I mean, folks coming out of college can get a million dollars that was kind of unheard of back in ninety ninety nine or or or .

the reality is like there are so many incubators. I mean, it's not as if Jason or Y C or any these folks give millions of dollars, right? Like these checks are still really small. So the point you can build something if you have the skills .

to build something, the gap right now is that there is a lot of people who have ideas about what they want to do, but they have no skills. And I think what we ve found in a viBrant market like today, I mean, this is the most viBrant have ever seen IT. There's at least three or four times as many started ups to choose from at the earliest stages.

And what we're seeing is the number of VC has not grown at that level. IT has grown, the number of plays has grown, but not at that level. Therefore, the average quality of a deal has gone up.

A the average quality of a funded deal has gone up, but the average quality of a startup has gone down. Does that make sense? yeah. So the ones I get funded are Better than ever, but the one the average is lower because there are so many doing IT. And then just the best piece office I have is when we talked about continuous learning.

Because if you are not building the product in some way or selling the product in some way, then what are you doing at the start up like you either build IT or you sell? There really isn't much more there, and a lot of people just have ideas and no ability to execute. You really have to be a developer, designer, U X person market or something. Uh, in terms of getting this product out to the world.

what what do you guys think about the other trend, which I think is really important, which is the administration of these firms? So you we're moving from a word where people used to care about name the brand sqa, sel, h and then now they they named the person right and they'll probably follow that person whether they are. So what do we think about that? There is a really interesting tweet from erik turnberry.

He said, founders don't want to raise money from institutions as much anymore. They want to raise money from individuals. And then if you marry that with what's happening with Angel is and all the south thern stuff isn't fact the trailer background for how like VC just kind of in some ways just kind of gets blown up the way that it's Normally been done.

I remember as a founder um when I started my company two thousand and six, there was a lot of this conversation in as as a sex point in the blogger and blogger community and like various websites that rated and there was generally a trend in the support network among C E O the adventure firms um of talking a lot about make sure you pick your partner, don't pick the firm um and so this I don't know, this is necessarily a new trench.

A moth is certainly something that I remember being top of mine fifteen years ago when I started my first company. And so much of IT was about make sure you have the right partner because that's who who's going to be on your board, that who you're going to spend time with, who is going to recruit executives with you. That is going to be helpful in finding your next crack the funding for you.

Um and I feel like that's that's always been the case. But you're right, the brand value of a firm has certainly become less useful um and focus have struggled to kind of figure out I I think a solution here. I mean, you see what and recent horses they launch in two thousand and nine and really focused on gonna be this kind of full service provider to start up. So I don't know how much that matters as much anymore as much as making sure you've got a great partner from the firm, the helping you give business.

I don't know it's actually you you're right. Freeze g, that's a continuing trend. What i'll say is the top firm ms are still as attractive or more attractive to founders.

The loser in this, I believe, is the mid tear firm or the lower tear firms that actually none of the partners, they are all that great. The performance is not that great. The value at is not that create when you do get a sqa or an increasing.

When I put craft in this as well, when you get one of those all car VC firms to join your aboard specifically, that is the key. When they join the board, they own over ten percent. You are annointed in a way that is transcended.

You will get pounded with inbound from the second year. And thirteen firms who want to triple evaluation and give you twenty million box IT happens like clock work. In fact, there are a couple of firms like that was a dog, the one sex I would always follow on the ideals. And so there were firms that were built.

L P H tags. L P H. We will mark up every deal.

So IT mean one page.

IT was one page. So it's like if you can get in to see a and you're willing to wait an .

extra around great investing day that now I think the big trainer is those firms in recent and sqa are now full stage where they have the late stage growth. They have a scout program, they have a seed program, have a series, a program, just the four.

It's not those guys also just it's all these other big cross oper guys that have come down tiger to durable.

I think that's the biggest trend of the last a fifteen years to moth. And I think this is what has enabled the proliferation of early stage startups and enable the the evaluation increment of the capital is float in the last stage is the um is the scale down from the big guys? I just want to kind of do a quick walk down memory lane because when you guys said you won to talk about this, I kind of remembered I I got my series b term sheet in two thousand eight.

I guess I was and um and or two thousand nine and I had three venture firms uh and recent was one of them that gave me a term to uh and the interesting thing about at that time with and recent was they gave me a turn out out out kind to raise thirty million dollars. They said we want to give you forty million and they up the valuation significantly and um and there was A I ultimately went with costal ventures. But there was this trend um that in recent was kind of in parting and I heard about a lot from other uh, entrepreneurs was that they were going out and offering more money the founder was asking for seeking at higher valuations and IT was this trend towards saying like go grab the market because the interesting thing about web scale. Economics and um you know web scale businesses is you get so much leverage and you can get an extraordinary rapid grow. I mean, the rate of growth could be incident um and and the leverage could be incident and .

so do if you do IT at the right round, I think that but so much of .

this was and then obviously that so that was a huge step up. And I remember in recent horror, begin to thousand and nine kind of started could build a reputation for doing this of kind of you know, putting larger checks out and saying, go scale. And then the the big crazy thing was the cross over guys started coming in and offering bigger checks in cut of this proven stage growth stage kind of funding.

And then obviously the big step up with softbank and soft bank with a hundred billion dollar vision fund and and ultimately, what exactly did that? This rub freeburg just on to when all these things happened, those large cher capital became available. Evaluation step ups were so significant for these later stage startups that the money flowed down and more money was raised in earlier stage venture that enabled this proliferation of capital, the proliferation of new startups and enabled them of startups at the earlier stage because of all the cross over money that started to come in and the blitz scaling of proposals and lots of money that was being thrown at the later stage. That to me felt like the reason all of the earlier stage stuff deliberated was because of the the amount capital a later state.

You're absolutely right. And now ten years later.

here's where we are in early Sparks on the next steps to out. Because, you know, I think what you did know, pretty thousand nine, ten billion dollars year in backs. Then when you started in two thousand and nine, step up to two thousand and and stepped thirteen billion last year, eighty billion was raved in specks.

This quarter, a hundred billion inspect inspect that you cross over the is taking you know growth stage private equity style risk in the public markets with this proliferation of capital. And we're seeing the benefit, the early stage and founders and entrepreneurs seeing the benefit because there's so much access to capital on the back end, you can take more risk on the early end and you can make more bets. And and I think you know, I think it's the next step up and we just keep seeing this step up.

Yeah, I tend to think that the growth stage is the most troubled and chAllenge because at the early stage, you can get a guy like sax or J K L on your board and you can grind. And I think that that's really important to get to product market fit. And at the public stage, you can get somebody like me, and you know, we can help transact and actually help optimize and run the business for scale and value. But in the middle, you have all these weird dynamics that no longer maybe not don't make as much sense. So just to give you a sense of that, the average deal size, okay, so the typical round is up three x over the last ten years.

three X H that that is absolutely anette ally. My experience .

um in late stage investors are doubling and tripling down on these mega als so that that average round size is up five ax in the last decade um the the typical pre money on a growth stage deal in two thousand and ten was one hundred pre. This is for the top quarter a uh and it's now or sorry for this is for the average. It's now this is for a growth stage. We are growth stage. A hundred three is now five hundred and seventy three.

Wow.

IT is getting crazy.

It's it's really.

really getting crazy. tiger. It's is here in the notes. Tiger global has announced the deal according to pitch book every forty eight hours in two thousand and twenty one. That's fabula.

That's fuck fat does. What tiger I think has figured out is there they started as public market investors and work their way down the stack, right? So they're very familiar with the public market valuations. They are seeing that these asks companies are that we I remember ten years ago, and I was doing yemen, we thought that the best outcome that you could have as a service company was like a one to two billion dollar exit.

That's why when microsoft offers is one point two billion and two thousand and twelve, we took IT, right? We're like we could work five more years, maybe get to a two billion or a well, now you're seeing what slack just got acquired by sales force for close to thirty billion. It's pretty routine to see sah companies IP, oing, IT.

Now ten, twenty, thirty billion and up. And so the exits are just so much bigger than anybody thought ten years ago. And we are the optimist.

By the way, there is a good tweet on this by um IT was jay malec. Basically he gave some stats. He said that if you're wonder why everyone wants to invest or be a VC today, the test from pitch book provides an answer.

We had forty three billion and exists in two thousand and ten. We had two hundred and ninety billion and exists in two thousand and twenty. So we had about seven x roughly greater exits over the course of a decade.

Now the average deal size is grown, three x and there's a lot more money going into ventures capital. But the reason why you are having all this money go in and all these new players because the outcomes are so much bigger. And then he said, and I agree with this, wouldn't be surprised of VC hits one trillion by twenty thirty.

So we're seeing just that. I mean, I member twenty years ago when I first got into the business like local value is a small little concentrate circle around stanford and now IT spread to service cisco and the entire bay area and to other cities and IT. This keeps getting bigger and bigger. It's the digitization of every market.

right? I mean, every traditional business, every traditional industry is being digitised in somewhere another. And so it's no longer attack enabled of other industries. IT is the industry itself.

We know that the the brand really matters in the early stage because they annoying you and they bring so much value in terms of working with you to solve problems. We know with backs whoever and IPO whoever is annointed, that really matters, right? The sponsor, but in the middle is all that cash. Now move to A A game of who will paper most for the least rights. In other words, series b to, you know, when you get involved to make this.

that just it's such a good point you so what you're now team up, Jason, is this next big category, which is if it's undifferentiated capital, at some point you're going to go to the logical conclusion, which is I don't want any delusion from this. I'm happy to take in the series a when I get you know craft or scores or benchmark.

I'm happy to take delusion in the IPO because that sort of the necessary process of diversifying the stock ownership, getting you know my users and my customers to be able to own the stock at sett sec. But in the middle now you have these companies like pipe and clear bank. We're now all of a sudden you can grow Jason in your bcd round and you have zero delusion.

So if you're founder, you know the best formula is gonna take serious action and seat capital from an expert single O G P brand person who knows that business category so well, right? If you're starting a SaaS company, you should probably get your seed from sex, you know raise your a from some expert or right, let me say differently, seed from J K, L, A from sax and then go to pipe and clear bank and fund IT all based on your recurring revenue growth and then go public the back. So just give you some uh .

data that I got from the which an idea the you would delete ten percent in your your seat round twenty percent in your a now you still have seventy percent of the company .

and you just sell your early contracts ahead .

of time to pipe and you're by the can I tell the story about pipes of .

pipe of painful thanks for no.

not me, a new David. They let us are big on the big. My beak is so that we get .

a profile.

Time, and let me compared .

to this is a beautiful .

now let me let me tell the pipe peak wedding story, because Harry, Harry, the founders told the story, he came to meet with me, my office craft. This is preak of IT. When people actually met in person, our principal is based in L A.

Michael tam new new hearing from his previous start up and brought in I I heard the pitch, which is basically to advance the the full value of these contracts if process companies and others. But he was so obvious, right? Because if you're access company, you spend roughly about a year of of a revenue on cat a cost acquisition cost, but the customer only wants to pay you monthly.

And so you have this huge negative casual cycle. So what if you could just take that contract and monodist IT right away, get the full value of the contract advance that you can pour IT into the next the next um your customers quiet tion cost and you don't need to delete yourself with venture capital. I said yes to hearing in like fifty minutes. I think it's a quick, as i've ever given a term sheet, we invested two million in the company in a twelve cap, and we did the deal of that day.

So within nine months of launched, pipers connected thirty five hundred customers and over a billion plus of A R, R to investors willing to purchase that revenue. To be clear.

it's a marketplace so they're not buying the anybody can go on the marketplace and say, I will buy slacks revenue for ninety one cents .

on the dollar but something more speculative .

in the lining, talking .

fucking shares.

That good email. Yeah.

i'm going, let's do a freeh's .

freebooter's.

launch a bio company together. We've lock out these beaks.

Go work on your life extension. We're working on our monetary extension right here.

Yeah, even more money, even more money.

you know. So clear bank works with the e commerce company is so what you do is you stitch in your connections to sharpen y and strike eeta. They are able to monitor how well you do and then they'll basically help finance you again, non delusively.

So clear bank companies captured fifty five percent more growth in twenty twenty than the prior year. So even in the midst of covered, these companies did really well. They have revenue based financing.

They've invested at one point six billion dollars to date. And IT turns out that you know their investor composition eight times more women funded than traditional V C. Uh by the I want to be clear, I was also a series investor in clear back.

I mean, I am such a believer in this middle section of venture disappeared. Like when you have these growth rounds, they're undifferentiated and they shouldn't be deluded in any way they perform. The founders should figure out how to grow non delusively the minute that they have some symbol's of product .

market fit. So then the deluded, the deluded points of the bookends or consumer products too, right, where you could get funded in a similar way, you could see the same transitioning into the kind of hardware business is and consumer .

business or there's an even bigger train that happened that I can talk to equity crowd funding CF. But I don't want to take you off your desk so you want .

to keep on the deck or you want to I say that the other big thing as as free break cess is like um so let me just summarize. So it's kind of like I think we were all going to as we see the venture capitalist change in the financial stack. Um it's going from organizations and these a more a morph financial organs down to individuals.

As that happens, I think what we're all kind of stating is it's incredibly valuable at the earliest stages to align yourself with a person that knows your business or your market right, and that's worth some amount of delusion. It's almost like getting a quasi cofounder, right? So in the seed in the series a but I think so that's one really important point of what's happening in the market. The second thing that I think we're all saying is why are we deluding ourselves to grow in these middle rounds?

If you don't have to.

it's unnecessary. And there should be really clever ways of non delusively financing yourself. And as as the market becomes more and more sophisticated, there will be more companies be on piping clear bank, to be clear.

But the point is that every kind of company that has product market fit should be able to finance themselves non delusively in the b all the way to the d and the e. And then the third thing, which is sort of what freed break cess is this last book, and is then you have sort of the past to going public. And this is where this back makes its on a sense, because you have a very certain cost of capital.

You can now architect the captain, where the founder remains in control, where they in the employees are still more than fifty percent. And you pull in the time of the IPO. Why is that important? Typically, today, these companies were taking twelve plus years to go public.

Now with Sparks, they've come back in and they're closer to seven and eight years. The reason is back to that argument of like if you want to be a winner, take most outcome. The most important thing you need at scale is money. And the way that you get money is by opening the commons on your finances and showing people who have lots of money why they should give IT to you and not something else. And so my going public in year six, seven and eight, that's where you pull in the billions .

of dollars so you can dominate. The word seeing is massive competition in the financing of massively competitive start up scenes. In other words, the entrepreneurs ecosystem has never been this viBrant.

And I want to point out one thing that the sec has done that has is going to change things dramatically. I believe when syndicates first came out, everybody said they were stupid. Nobody would ever do IT.

First one we ever did famously was calm down com. We put in three hundred and twenty eight thousand dollars, became worth over one hundred million. We're on track this year to do five deals a month, sixty deals and will put fifty million to work this year at the sync.

Dom, think about that. My fun is forty four million that's over three years so now the cynics goin so big um that just understand dict what exactly so good to tell my L P S. The next time around let's have a discussion about this. But anyway I want to point out what republic docker happened this week. Republic doc kca is equity crowd funding.

This means civilians can there used to be a cap on an equity crowd funding of one million dollars every year and there's a lot of auditing and financial review you have to do and you pay six percent to whoever raise the money. But it's um there is no sponsor involved in this. So as an investor, you don't get me as a lead or triumph as your sponsor or sacks on your capable, but you can go on to the public now which has one hundred thousand investors on IT and gum road, which is doing ten million thousand a year, just raise five million in one day. Sayye, who was also running a rolling fund with Angela st. And he has eight thousand, six hundred fifty six investors, which means people are putting in under one thousand dollars each.

amazing.

And it's capt. At five million now then oran hamilton Warren's backstage capital did a very non traditional, i'll say, raise. She's not raising for her fund. SHE sold ten percent ownership was in the process of selling ten percent owner ship in her venture capital fund start up studio at fifty million dollar valuations.

You selling ten percent of if you buy shares in that you don't get Carry, but you get ten percent of her career and management fees forever. So IT will be like buying ten percent of craft or whatever the point is you, the VC is get a boxed that of this and this. Imagine if L, B and b or uber decided fucked, we're going to let our drivers by shares through this.

And they said we're starting this crowd funding for five million. And they did IT every year because you can do the five million every single year. So every year, you just allow folks who are in your stakeholder pool, you email them in the may bian. It's such explain .

the island thing. So SHE sorry, SHE sold.

It's a little compleated if your page down to make your earnings. yes. So if you go to the flow of funds and that link I sent republic dco sesh backsaw SHE is took all of her different funds and said, you can buy ten percent for five million dollars.

You own ten percent of essentially Scott capital, uh or White company, whatever you want to refer to her um you know company asked her holding company then every time he gets management fees, every time he has distributions from her Carry SHE is going to give ten percent of that to these folks forever. I don't know that's a great idea, but it's A A, A new idea. I I don't know if the investors in that are gonna get A A massive return. They're doing IT because .

they want to support the incredible my gosh, it's so, so disruptive. It's so disruptive. Wow, it's incredible.

Well, because lets anybody really spend up a new venture firm because there .

ten I will have to say not a lot attraction um you know from the the classic L P S of the world. But now just like we saw a game stop, just like we see with bitcoin, just like we see with nf and Robin hood da traitors, there are new entrance here.

And I think there's gonna a world where I will be able to fire up a indicate and say, I would like to raise ten million, but i'm liming IT to one thousand dollars per person and ten thousand people uh, invest or are limiting IT to five hundred dollars. So instead of, you know, going away for the weekend or going to vegas and blowing a thousand dollars, somebody could say, you IT I got to fix to below five hundred, bank up of five hundred. The next start I see, and this is a democracy, zo, that could change everything to make amErica so much more competitive with what we're seeing in china with jack mod disappearing and look said I said this before.

like like what's what's crazy is like if you talk about like systemic inequality and poverty, it's like the government loves to give poor people casinos, sports bedding and lottery tickets. You but the idea that they could invest one hundred dollars into a startup is illegal, even though startups generate fifty percent of your career.

So even if what you did was you gender, you invested in the market beta of startups, let just say that degrades IT would still probably be close to ten percent. And the market you d you'd be at the S M P returns, you know over many, many years, a percent. So twenty five .

percent Better .

IT would be incredible with, by the way.

twenty five percent Better to month with the outside chance of having a great lam and and that's why I love this um for IT so do we want to rap here we have closing dots. Well, I just think .

it's like if you think of like that thing of like all the money flows changing. The other thing is like all the people are changing. And then what exit before? It's much, much easier because the technologies are changing. You put these three things in a soup and IT just seems like our best days are ahead of us.

I think IT is going to be amazing for entrepreneurship. All the answers are out there. If you want to start a company, the skills es are freely available to you are you can learn anything online.

I think the message I really want people to understand is, you know, you may you may believe that the world is, uh, filled with inequality and racism and bad actors, and you would be right. But what's also right is that every school can be learned. Capital is available now more than ever, and there is a clear path for you.

If you just stop watching television and learn to be A U X designer, a cells executive of a marketing or growth, the executive or a developer, you can change the world and change your a lot of life and be really fucking rich. Don't buy into this victim mentality. It's complete other nonsense that crazy lefties are saying, everybody stupid and nobody can learn. And I got a bag red pills here, and I have been pounding them. The world is a giant opportunity for all of you.

Go and I think it's time to announce freeburg and I would like announce that we've started a combination uh incubator and uh early age venture from we call IT punch draft and uh it's play on the words launch and craft. I think the point ches the porch .

is more when we're first syndicate d here.

somebody I I never get the first. You guys are .

doing deals left and somebody you out there, there people are folks listening to this podcast who have great businesses. What we should commit to them is we will help you be the least deluded, and we will try to share the big wedding amongst all the other folks listening to this. So if you have a great company and you're thinking of raising capital, come to the one of the four of us, and we will hand roll a solution for you.

yes. Okay, let just do IT is like that doesn't peak OK hand hand. We will handle the solution that will allow the four of us plus or everybody else in this synthetic to invest. And then we will help you non delusively grow your business as long as possible and then take a public.

okay, I am setting up wet your beak dog on which is currently redirecting to the olympics. It's going to be a type form and the type form is gonna you.

I will delete your business, but the rest guys can do IT on anyway.

Go to wet your big document and fill out the form, tell us a little bit about your business and and I will go to all for best ties in the database. We'll share IT. What you're .

beak is the new database I bought the bin.

what your beak dog on from one .

of the time I turning into a commercial for .

I don't formation.

Now this this is jake out attempt to divert and steal my deal flow.

What is talking about where partners .

are fucking people?

We are. Who did I just bring six, seven companies to the other day?

Craft ventures? Stock comb? Do not. That's that's a website. That's the .

website are yeah OK.

Show me.

me break, man, come on. And where I got so many deals, are we in backache? Are I listen, we love all of the audience and we love our best, love you best to you. Ve you .

guys love.

love you sexy pool. When we play cards.

come on this play cards monday.

done, done.

sending the invitation or .

everybody is another all in pockets. If you want to resubscribe, we're do anything like that. sure.

Why not? Uh, uh, shout out Young spells. Arg, thank you for making all of our great tracks. Uh, do a search for Young Y U N G spiller g in your uh in spotify, buy your songs like the songs and uh he is the greatest um if you want series a funding received funding David sacks if you want to back chamar and if you want to fold some proteins and um .

you .

can you want some cubits I get email freeburg somebody told me that the quality of the show he calls IT the freedoms g index g talks a lot. It's a great episode when freeburg demise and doesn't talk a lot. It's a shit episode. I think again.

say demere demerits .

french for sleep IT means you what took a nap. You're just french for sleep. You're just either day more more as a more day. Yeah, he demoed. okay. Everybody will see you .

next time the your winners.

man.

We open sort to the fans and .

got crazy with.

We should all just get a room, just have one big huge org because.

your.

Tension get.