Loeb Enterprises II President, CEO, & Founder Michael Loeb Talks Fintech Entrepreneurship
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We saw that with the stocks pairing gains today. It's just a reminder that when we think we can't be surprised, we still can, certainly as investors, and that plays out. The markets react very quickly, very swiftly, and you can see that clearly in the trade. All right, you are listening and watching Bloomberg Businessweek Daily. Carol Masser, Tim Stenevek, live here. And I believe we can go to our guest.

We're doing this in real time. You guys are seeing the sausage be made. Michael Loeb is with us. This is his home. This is his event. He's the founder and CEO of Loeb.nyc, and he co-founded Uncharted a few years ago. And I got to talk to you this morning, so I feel kind of doubly blessed to get some more time with you. The event is underway. Tell us about what you're hearing, some of the things so far. Well, I think that...

There's a great deal of buzz. Most people are saying exactly what you are, which is that they're doubly blessed just to be here and get to know everybody else. But I mean, the...

If you were to take a look in the background, you would see 600 people talking to 600 other people. It's quite the event, and what we really want to do is foster relationships between investors and companies, between companies and companies, and between CEOs looking for talent and talent looking for CEOs. So I think

I think a good time is being had by all, and certainly the weather has been totally cooperating. I think you had something to do with that, so I thank you for that. You're very welcome. Right? So, yeah, a little tiny windy, if you could take that down just a touch. I'll take some wind. This is kind of perfect. It beats the weather we had earlier this week. I was a little concerned about that. You know, an event like this, you've been doing this for a few years. It started during the pandemic. It started a lot smaller.

And I heard you say earlier today, and your partners say this too, Noah, that he is running into people constantly. You say they raised money as a result of being here. They found a co-founder here. They found employees here. How do you measure the success of an event such as this in the days, weeks, and months following it? Right. I wish we could because I should have a vig on all that.

and all that, don't you think? Yes. So we were just talking to Dave and John, like, you know, Shark Tank kind of thing. Maybe you could kind of get in on that. You've known Noah for a long time. Right. So, you know, I got to tell you, we do solicit testimonials of exactly the things that you're talking about. We have quite a few of people saying, you know, I met my founder there about...

Two years ago, Noah and I get an invitation and it was shrouded in mystery. And it was three women who had us go to an event downtown and they brought us up on stage. Everybody started to clap. And what that was is these were three women never met before. They were all, you know, elite athletes. And they decided there should be a fund

supporting elite athletes. That's great. That they had a different point of view, a different sense of how to compete, and they all got along very, very well. And that thesis led to a $50 million fund. So it's that type of thing that really propels us. Well talk to us about capital. How much is out there for startups? Wow.

You know, it's funny, things go in cycles, as you know. This is not an up cycle for capital formation. Last numbers I looked at, and they're a little bit stale, but down 60 or 70%. Certainly the secondary market, if that's any indication at all,

does illustrate that there's a lot of illiquidity looking to get liquid. Not nearly as frothy as it used to be was IPOs, even though that's starting to unlock a little bit. So I know it is hard, and the money does gravitate these days to AI. So if you have AI-- So when there is an idea, when there is a startup, that's where it goes. It goes there, right. And what folks don't,

I think really realize or appreciate is the forces at play in venture and venture funding and venture capital, which is, I sometimes call it a beauty contest, and that is because there's one breakout winner in a category, and then all the LPs are asking their GPs

what is your AI strategy? And if the answer is, we think it's a little oversold, we think it's a little bit frothy, where there's going to be a couple of winners and a lot of losers, we're taking a wait and see attitude, the answer is bye bye, I'm bringing my money to that fund that made that investment. So a lot of pressure for them to jump in.

And it's in those situations that not so good deals are made. Right. So, yeah. Does it, you know, in terms of cycles, does it feel like this AI cycle is different than previous tech hype cycles? And the reason I ask, and look, nobody wants to hear or utter the phrase, this time is different. But if you look out at the private markets right now,

You've got sky high valuations, I think many would argue, for open AI, right? For anthropic, for perplexity. You have meta platforms coming in and dropping billions of dollars to buy 49% of an AI company that barely existed. You have founders being poached.

We're talking $100 million signing bonuses. Yeah. For an individual to go to a large company. Right. So I look at my mailbox every day. I'm looking for my $100 million check. Hasn't come in yet, right? So if you're going to range it, I really like that. You know, make your web browser or your website .ai, and maybe it'll happen. I don't know. Done. So to me, and this is not quite answering your question, but I'm...

It's all about me, so I'm going to answer it from my perspective, which is that, to me, it feels different. Now, what does it feel like? I've been around for long enough, so I'm something of the elder statesman here. I've been around long enough that I've seen a few cycles,

This feels like the late 90s, and the late 90s was the advent of the internet. Right. And it feels this profound. Now, you know, people would say, well, you know, if we look back two or three years, it was NFTs, and that was a false positive. And before that, it was blockchain, which was sort of a false positive. And before that, it was cannabis. And before that, it was Bitcoin. And, but...

This one feels real, and this has the possibility of disrupting entire industries. I had breakfast, by the way, with a friend.

This past week, he has a unicorn. Business is worth almost $2 billion. He has 270 people. And he said, Michael, by year end, it's 120. Meaning he is going to lay people off because AI has become so efficient. Fast-growing company. Super fast-growing company. Unicorn. That's scary. That's really scary. I know, but that's what's going on.

So do you think there is something to what Dario Amadei has said, who's the founder of Anthropic, among the co-founders of Anthropic, there are many, that in a couple years...

we're going to see a serious uptick in unemployment as a result of this tech. This is something policy makers need to be freaking out about right now. Yeah. Well look, I respectfully disagree and all I have to go on is history. And starting in the 1700s, right, when there was that industrial revolution in England and we burned down all the factories with a spinning wheel thinking everybody would be unemployed. That has not happened.

markets, employment, people have an amazing ability to retrain themselves, find the opportunities,

In the end, I think we're going to be okay. Is there going to be some displacement? There's always some displacement. I hope you find something that we can have less lawyers because we've used less lawyers, but I think at the end of the day, brilliant people are going to find their way. And the people you're talking about are very smart people, engineers. They will find their way. We're always going to need them.

And, you know, this is going to be like every other labor-saving prediction. This is going to be just another one. All right. We're going to unfortunately have to leave it there, but thank you for inviting us. This has been fun. Thank you for inviting me. See you guys. I believe this is yours.

Oh, that's not what they told me. They said after today, it's all yours. Is that not right? Michael, thank you again. I wouldn't be so nice. Oh, the keys, please. Thank you. Michael Loeb, founder and CEO of Loeb.nyc. All right, coming up next, we're also going to get to, I guess I want to say almost another serial entrepreneur, another big...

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